Seeds of change in rural landscape

Several indicators in the last few weeks point towards a stronger "Rural India", prompting agriculture analysts and economists to assess if the farm sector is indeed in the midst of a real turnaround.

- SANJEEB MUKHERJEE

Several indicators in the last few weeks point towards a stronger "Rural India," prompting agriculture analysts and economists to assess if the farm sector is indeed in the midst of a real turnaround.

The recent provisional gross domestic product (GDP) estimates for FY25, for instance, captured the early signs of a rural consumption boost. The numbers showed that private final consumption expenditure had outpaced the GDP growth last financial year (FY) and the share of consumption in GDP had risen to its highest level since FY05 at 61.5 per cent. The commentary around this data set was that even though urban consumption remained dull, rural demand picked up, aided by robust growth, in the agriculture sector and low inflation.

To be more specific, the farm sector growth in the fourth quarter of FY25 was pegged at 5.4 per cent against 0.9 per cent in the corresponding quarter of last financial year. This is expected to act as a catalyst in propelling the full-year gross value added (GVA) in agriculture and allied activities for FY25 to 4.6 per cent, up from 2.7 per cent in the previous year, in real terms.

Numbers further showed that in nominal terms, the agriculture and allied sector registered a growth of 8.7 per cent in the fourth quarter of FY25 against 7.9 per cent in the corresponding quarter of FY24. For the full year, GVA for the farm sector in nominal terms was registered at 10.4 per cent against 9.6 per cent in FY24.

A strong monsoon, aided by robust prices, spurred the agriculture and allied sectors to their good performance in FY25. The food grains production data reaffirmed the trend of a rural revival. The third advance estimates released a few weeks ago said food grains production touched an all-time high of 353.95 million tonnes in the 2024-25 crop season (to end in June), largely due to the record harvest of rice, wheat and maize.