Economic Survey 2025: Agriculture grows 3.5% in Q2; Kharif output surges

The ‘Agriculture and Allied Activities’ sector has long been the backbone of the Indian economy, significantly contributing to national income and employment. According to the Economic Survey 2025 tabled in Parliament on Friday, in FY24, this sector accounted for approximately 16 per cent of India’s GDP at current prices and supported around 46.1 per cent of the population. Beyond its economic contributions, agriculture plays a crucial role in food security, influencing other industries and sustaining livelihoods.

In recent years, the sector has demonstrated resilience, growing at an average rate of 5 per cent annually from FY17 to FY23, despite challenges. In the second quarter of FY25, the agriculture sector recorded a growth rate of 3.5 per cent, marking a recovery from the previous four quarters where growth varied between 0.4 per cent and 2.0 per cent. This improvement can be attributed to favourable weather patterns, advanced agricultural practices and government initiatives to enhance productivity and sustainability.

Here are 10 key insights into India’s agricultural sector:

1. Steady growth despite challenges

• The agriculture sector has shown consistent growth with a CAGR of 5 per cent from FY17 to FY23.

• Growth in Q2 of FY25 stood at 3.5 per cent, reflecting a recovery from previous quarters.

2. Rising kharif foodgrain production

• Kharif foodgrain production in 2024 is projected at 1647.05 LMT.

• This marks an increase of 89.37 LMT over the previous year and 124.59 LMT above the average output.

3. Agricultural income growth

• Agricultural income has grown at an annual rate of 5.23 per cent over the past decade.

• This compares to 6.24 per cent for non-agricultural income and 5.80 per cent for the overall economy.

4. Crop yield and productivity gaps

• India contributes 11.6 per cent of the world’s total cereal production.

• However, crop yields remain significantly lower than those of leading producers.

5. Growth in high-value sectors

• The fisheries sector has shown the highest CAGR of 13.67 per cent from FY15 to FY23.

• The livestock sector follows closely with a CAGR of 12.99 per cent.

6. State-wise agricultural performance

• Andhra Pradesh leads with an 8.8 per cent CAGR in agriculture (excluding forestry and logging) from 2011-12 to 2020-21.

• Madhya Pradesh follows at 6.3 per cent and Tamil Nadu at 4.8 per cent.

7. Shift towards high-yield crops

• States have diversified towards crops with higher yields:

  • Andhra Pradesh: Jowar

  • Madhya Pradesh: Moong

  • Tamil Nadu: Maize

8. Challenges in oilseed production

• Oilseeds have seen a slower CAGR of 1.9 per cent.

• India continues to rely heavily on imports for edible oils.

9. Changing dietary preferences

• Rising incomes are driving increased consumption of horticultural products, livestock, and fisheries.

• Effective post-harvest management and robust marketing infrastructure are needed to support this shift.

10. Government initiatives for agricultural development

• Programmes such as Per Drop More Crop (PDMC) and the National Mission on Sustainable Agriculture (NMSA) promote sustainable farming.

• Digital platforms like the Digital Agriculture Mission and e-NAM enhance technology adoption and price discovery.

• PM-KISAN provides direct income support to farmers.

India’s agriculture sector continues to evolve shaped by technological advancements, policy reforms and changing consumption patterns. While challenges such as yield gaps and dependency on imports persist, targeted interventions and investments promise a sustainable and prosperous future for Indian agriculture.