India had achieved 353 million tonnes (MT) of foodgrain production in Kharif 2024-25. That helped boost the agri growth and keep food prices in check. With the acreage sharply higher in the current year, the foodgrain production was likely to be sharply higher. Delayed exit of monsoons played havoc and has caused severe damage to crops, mainly in states like Maharashtra, Rajasthan, and Punjab. The 2.3% Kharif  growth may now even degrade into contraction. 

The output damage to Kharif and the impact on agricultural growth in the second quarter is just the direct impact. Agricultural growth was about 4.6% in FY25 and at 3.7% in Q1FY26. However, the real concern is not just on the agri output. Firstly, there is the possibility that the monsoons may extend up to mid-October, resulting in more damage. Also, there has been substantial silting of the fields and that is not only likely to delay the Rabi season sowing, but will also impact the Rabi output. Of course, all these factors combined will reduce the foodgrain buffers of the center, and also push up food inflation in a big way. 

A slowdown in Kharif output could have bigger repercussions for prices and also for the overall GDP growth. While the Q1FY26 GDP came in robust at 7.8%, the big push was not just services. Yes, it was services that grew at a rapid rate, but it was agriculture that offered the base. Normally, agriculture output has a dual effect. It has a multiplier effect, so any sharp growth in agricultural output will also lead to positive impact on the manufacturing and services space. Also, the Kharif output is a key driver of the food inflation, which has 45% weight in the inflation basket. Lower inflation has the positive impact of boosting real GDP growth, even if nominal growth falters. 

The enemy of analysis is speculation. It is appreciable that the government has come and updated its Kharif growth down to 2.4% for the current Kharif. It is more critical that the government is updating the figures on a continuous basis, so that there is no room for any form of speculation. It is ok, even if we end the year with a contraction on the Kharif output. After all, these are acts of God on which we have little control. The more transparent the government is in sharing such information officially, the less will be the extent of speculation and the chances of wrong conclusions will also reduce. Kharif is not going to be a crisis, but opacity in data sharing will!