Agriculture appeared to be one of the few bright spots for the second straight quarter amid a grim GDP performance clocking a growth of 3.4 percent at constant prices in the July- September quarter as per the data released by the National Statistical Office (NSO) on November 27.
In the April-June quarter of 2020-2021, the agriculture sector had surpassed the overall GDP growth by clocking a 3.4 percent growth.
A favourable monsoon in over six years resulting in a bumper kharif season is among the primary factors for the outperformance of the farm sector despite the COVID-19 impact.
According to the NSO data released on November 27, the gross value added (GVA) from agriculture, forestry and fishing grew 3.4 percent at constant prices in July-September 2020 over the same period last year. This, however, was against a 7 percent year-on-year decline in the overall real GVA for the second quarter.
Agriculture GVA at current prices fell at 7.7 percent year-on-year during the July-September quarter against a contraction of 4.2 percent for the overall nominal GVA.
"India’s July-September GDP confirms the faster normalisation of the activities in Q2, with a stronger than expected pickup. Economic contraction continued in the September quarter but less severe than the June quarter, a fall of 7.5 percent is better than the expectation from the street. The agriculture sector continues to stand out during the quarter on better Kharif output. The growth outlook has improved with the Q2 GDP print, now the market will look for the sustainability of the demand, especially after the festive season, and watchful will be the direction of high-frequency indicators," B Gopkumar, MD and CEO, Axis Securities, said.
Farm sector growth was at 2.1 percent at constant prices in the second quarter of FY20.
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