Weakest monsoon since 2015 prompts ICRA to cut FY27 farm growth forecast

Southwest monsoon rainfall fell to 87 per cent of the long-period average in 2026, the lowest since 2015, prompting rating agency ICRA to cut its agriculture, forestry and fishing growth forecast for the fiscal year to about 1 per cent from 1.3 per cent.

The deficient and uneven rains have already weighed on kharif sowing, which was 1.2 per cent below year-earlier levels by end-September, while depleted reservoir levels raise concerns over the upcoming rabi season, particularly in southern and some northern states, ICRA said in its monsoon wrap-up.

“ICRA remains circumspect around the potential impact of the weak monsoon on crop output and farm incomes,” the agency said, warning that weaker farm incomes could dampen rural demand in the second half of FY27 and create upside risks to food inflation.

Rainfall during June-September was 87 per cent of the long-period average, with the season affected by the development of El Nino conditions. June rainfall was just 60 per cent of the LPA, while July saw 103 per cent, followed by 84 per cent in August and 93 per cent in September. The rainfall distribution was also sharply uneven. The East and Northeast region received 74 per cent of LPA and the South Peninsula 76 per cent, both in the deficient category, while Northwest India received 94 per cent. Central India was the only major region to record normal rainfall at 97 per cent of LPA.

Kharif acreage stood at 110.7 million hectares at end-September, about 1.2 per cent below the year-earlier level but broadly in line with the historical average.

Several southern and central states recorded sharper declines in sowing. Karnataka’s kharif acreage fell 14.8 per cent from a year earlier, followed by Andhra Pradesh at 6.1 per cent, Telangana at 4.9 per cent and Maharashtra at 4 per cent.