The agriculture sector in India is expected to see better growth in the current financial year, driven by favorable monsoon rains. Government sources report that the Gross Value Added (GVA) growth rate in agriculture and allied sectors reached 3.5% during the second quarter of 2024 (July-September), up from just 2% in the first quarter.

This increase is attributed to the abundant rainfall during the southwest monsoon, which has set a strong foundation for sustained growth in the third and fourth quarters.

Historically, the GVA growth in the agriculture sector has been low, ranging from 0.4% to 2.0% in the last four quarters, making the 3.5% growth in Q2 a positive development.

If the sector maintains a growth rate of 4% or more throughout the year, it could have significant benefits for the national economy.

Rural demand would likely rise, leading to better incomes for farmers and boosting consumption. This could also indirectly stimulate industrial growth, particularly in sectors like FMCG, which have been struggling to boost demand.

As rural and urban economic conditions improve, there is potential for increased demand for various products, supporting broader economic recovery.