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Agriculture grew 6.2 per cent in 2019-20 and 4.1 per cent in 2020-21 when the Indian economy’s overall output increase was just 3.9 per cent and minus 4.2 per cent in the two years. The farm sector posted a respectable growth of 3.5 per cent and 4 per cent even in the following two fiscals. The Covid period was, indeed, one of Indian agriculture’s finest moments, as farmers harvested bumper crops while much of the country was locked out of economic activity.

The first quarter of 2023-24, too, has seen the sector grow 3.5 per cent year on year. Agriculture acted as a shock absorber for the millions who had to reverse migrate to their villages. Between 2018-19 and 2021-22, agriculture’s share in the total workforce rose from 42.5 to 45.5 per cent. Indian farmers also ensured plentiful grain availability for the public distribution system, which was the most effective social safety net during the pandemic-induced crisis.

The above run was significantly enabled by good monsoons — four in a row from 2019 to 2022. That seems set to end this year. Rainfall during the southwest monsoon season (June-September) has so far been 10.7 per cent below normal, with India experiencing the driest ever August since 1901. A strengthening El Niño can aggravate the situation.

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Thus, even as other sectors, particularly services and construction, are doing well along with clear signs of a private capital expenditure revival, agriculture is threatening to be a drag on the economy. El Niño may well be the biggest risk to growth for the rest of this fiscal.

But it isn’t agriculture’s impact on growth that would be a worry as much as that on inflation. The harvesting of the rabi crop in April-May would coincide with the Lok Sabha. Even before that is the kharif crop, whose market arrivals will start from this month-end. Their size will influence the course of food inflation that is already at 11.5 per cent.

Any hit to rural incomes and increased inflationary pressures can affect not only private consumption, but also voter mood. The Narendra Modi government is obviously aware of this, which explains the various supply-side measures it has resorted to in recent months. Many of these — from export curbs to stocking limits — have been regressive, which only shows how agriculture remains an outlier in the Indian economy.



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