India’s agriculture and allied activities need to grow by a healthy almost 5 per cent during the fourth quarter of 2016-17 to reach the estimated 4.4 per cent full year growth, which though among the best in recent times, will be slightly lower than the October-December quarter.
According to recent data released by the Central Statistical Office (CSO), agriculture and allied activities is expected to grow at 4.4 per cent during 2016-17, while the growth in the third quarter is estimated to be 6 per cent.
However, with the final rabi estimates not out yet which also adds to the element of uncertainty, the Centre seems to have adopted a cautious approach in the fourth quarter.
A positive base effect as compared to the negative 2.2 per cent in the third quarter of 2015-16, will also impact the 2016-17 January-March quarter.
An uncertain weather during the harvest time, might have also added on to that.
The GDP estimates for the third quarter did take into the initial rabi harvest projections, which projected a bumper crop, but in the absence of the final estimates, the CSO seems to have played it safe.
Nonetheless, experts said any growth rate over 4 per cent for agriculture and allied activities is excellent.
“In the fourth quarter, even if the sector grows by almost 5 per cent it is not bad though it might be marginally lower than the third quarter growth of 6 per cent,” Madan Sabnavis, chief economist at CARE Ratings told Business Standard.
P K Joshi, South-Asia Head of International Food Policy Research Institute (IFPRI) is more optimistic.
He said both the fourth quarter estimates and also the final agriculture GDP numbers for 2016-17 is expected to revised as rabi production is looking really good.
“Overall, I feel 2016-17 agricultural production will be over 5 per cent; higher than the CSO estimate of 4.4 per cent, while for the fourth quarter (January-March), my feeling is that growth will between 5.5-6.0 per cent,” Joshi said.
He said that the reasons for his optimism is that wheat crop is looking very good, so also is mustard and chickpea and also horticulture production.
“I feel CSO might have been slightly cautious in estimating full year agriculture GDP growth as the situation on the ground is good, which will be positive for farmers as well,” Joshi said.
The Centre in the second advanced estimate for agriculture production, projected the 2016-17 (July-June) rabi harvest at 134.47 million tonnes which includes an all-time high wheat production of 96.64 million tonnes.
Total foodgrains output in 2016-17 is estimated to be a record 271.98 million tonnes, almost 21 million tonnes more than last year.