Stories
Weakest Monsoon Since 2015: ICRA Cuts FY27 Farm Growth Forecast to 1%
- •ICRA has cut its FY27 agriculture, forestry, and fishing growth forecast to 1% from 1.3% due to the weakest monsoon since 2015, which saw rainfall at 87% of the long-period average.
- •Deficient and uneven rains have impacted kharif sowing, which was 1.2% below year-earlier levels, and depleted reservoir levels raise concerns for the upcoming rabi season, especially in southern and some northern states.
- •The agency warns that weaker farm incomes could dampen rural demand in the second half of FY27 and create upside risks to food inflation.
- •Rainfall distribution was sharply uneven, with East and Northeast, and South Peninsula regions receiving deficient rainfall, while Central India was the only major region to record normal rainfall.
- •Lower reservoir storage, particularly in southern India, could affect rabi sowing of irrigation-intensive crops like rice and wheat, though non-crop segments of agriculture may cushion some impact.
Key Questions Answered
ICRA lowered its agriculture, forestry, and fishing growth forecast for FY27 to about 1 per cent from 1.3 per cent because the southwest monsoon rainfall fell to 87 per cent of the long-period average in 2026, marking the weakest season since 2015 and impacting kharif sowing and reservoir levels.
Rainfall distribution was sharply uneven across regions, with the East and Northeast receiving 74 per cent of the long-period average and the South Peninsula receiving 76 per cent, both falling into the deficient category. Meanwhile, Northwest India recorded 94 per cent and Central India recorded normal rainfall at 97 per cent.
As of September 24, overall reservoir storage stood at 71 per cent of the full reservoir level, significantly lower than 90 per cent from a year earlier, with particularly severe shortages in southern and northern India that could impact irrigation-intensive rabi crops like rice and wheat.
