Gross value added (GVA) for agriculture and allied activities is projected to grow at a modest 2.4% in real terms in FY26, a decline from the 4.2% reported in FY25, according to the new series of annual accounts with a 2022-23 base year.
Analysts said the modest growth in the agricultural sector as per the second advance estimate for the current fiscal is largely due to the base effect and depressed prices of agricultural commodities.
“Agriculture growth is lower based on the new series at 2.4% but could go higher once rabi figures are out,” Madan Sabnavis, chief economist, Bank of Baroda, said.
Rebasing Impact
The agriculture ministry is yet to release production estimate for the rabi crops including wheat, pulses and oilseeds for 2025-26 crop year (July-June)
As per the old series, growth for agricultural and allied sectors including livestock, forestry and fishing, was estimated at 3.1% for the current fiscal and 4.6% for FY25.
The new series of estimates replaces the previous series with a base year of 2011-12. As per the new series, the agricultural growth of 2.6% is estimated for 2023-24.
The agri GVA growth in the third quarter of the current fiscal according to new series grew slower at 1.4% against a growth of 5.8% in the same quarter of FY25.
Inflation Pivot
According to a statement by the statistics ministry, the new series relies on quarterly estimates of various crops, season-wise estimates of major livestock products and quarterly estimates of inland and marine fisheries production.
Meanwhile, as per a new series of data with a base year of 2024 released recently by the statistics ministry, retail food inflation in India came out of the negative zone (deflation) after seven months in January 2026, rising to 2.13% year-on-year as tomato and coconut became costlier.
During June–December 2025, food inflation measured through the 2012 series was in the negative zone largely due to the base effect and a fall in prices of vegetables and pulses.
Despite the rise in food inflation, prices of garlic (-53%), onion (-29%), potato (-285), arhar dal (-24%) and peas (-15%) declined last month.
These five commodities have a combined weightage of 2.48% in the consumer price index (CPI) basket.