Monsoon foray eases concerns over economy

    Women labourers work in paddy fields of Medak district, some 60 kilometers from Hyderabad. File photo: AFP
  • A near average monsoon received so far, with bountiful rains in the sowing season of July first fortnight, propels the economy towards 7.5 per cent growth

The India Meteorological Department (IMD) has predicted a strong monsoon this year. If so, it could be the most plentiful monsoon in 25 years.

A good monsoon hopefully follows two consecutive years of drought.

IMD measures the quality of monsoon as normal, surplus or deficient based on a standard scale 89 cm, which is the long period average (LPA) of 50 years of monsoon rains from 1951 to 2000. A normal rainfall is between 96 and 104 per cent of 89 cm. Surplus monsoon occurs when the rainfall crosses 110 per cent of 89 cm and deficient monsoon is when the rainfall is below 90 per cent of LPA.

In June, the rain fell short of IMD’s cumulative normal—the monsoon was weak, at 11 per cent deficit. But in July it bounced back, clearing the accumulated deficiency till the period. In July it rained 7 per cent more than the normal. But cumulative till August is giving 3 per cent below LPA. (IMD data as on August 26)

Central India, north India and several areas of east India received robust rains. Torrential downpour caused flood in several areas of Assam, Bihar, and Madhya Pradesh.

However, monsoon clouds below normal in large parts of south peninsula. Met divisions that suffered the worst (-20 per cent to -5.9 per cent) are Kerala, coastal Karnataka, eastern parts of Gujarat, Punjab, Assam and Meghalaya.

West and east Rajasthan, west and east Madhya Pradesh received excess (+20 per cent) than normal rain. Other Met divisions experienced normal (+19 per cent to -19 per cent) rainfall.

So far, not bad

So far, it has not been bad. Nearly 99 per cent of India received normal to excess rainfall. India is getting a normal rainfall this year after a two consecutive years of deficient monsoons. Last year's drought had affected a quarter of Indian population—330 million people.

Kharif crop cultivation—crops cultivated during monsoon like paddy, maize and millet—expanded to 799.51 lakh hectare in comparison with last year’s 752.29 lakh hectare, as on 29 July. But in the south, crops have taken a beating. Paddy, sugar, pepper, coffee, tea have been affected because of deficit rainfall.

Shortage of rainfall in the first half of July can harm sowing. Fortunately, abundant monsoon in July saved the monsoon crop.

The US Climate Centre has predicted a few low-pressure areas building over off-coast regions of Andhra Pradesh and Odisha, between August 24 and September 9. However, IMD does not see prospects of good rains in the south peninsula.

The cumulative total over the country as a whole is 657.8 mm, slightly below the cumulative normal 678.1 mm (till Aug 26).

Huge impact

Two-thirds of Indians depend on agriculture for their livelihood. Though farm sector contributes less than 16 per cent of India’s $2 trillion economy, it is significant as it provides more employment than any other sector.

No activity in India remains untouched by monsoon, whether politics or economy. Psychological effect on monsoon of Indians remains unparalleled.

Crucial for economy

Two-thirds of Indians live in villages. A good seasonal rain is the best security against food inflation that triggers inflation in other sectors, too.

Monsoon has an impact on overall GDP, affecting most sectors like food, power, automobile, agri industries, transport, health, construction, bank, telecoms, fertilisers, electronics and stock market. The Indian economy is highly sensitive to agronomics.

A good monsoon propels demand for manufactured goods. Villagers splurge on non-durable goods such as processed foods, soft drinks, drugs, toiletries and consumables. Indian fast-moving consumer goods (FMCG) depend more on the rural people. Following a good monsoon, stock of FMCG rises thanks to push from rural areas. Purchase of gold is also at its peak. More loans are disbursed after surplus rains. More rains means more talking over telephone. Movies, music and entertainment do well in seasons of good rains.

Bad monsoon will increase debt, farmers taking their own lives. Farmers postpone purchase of tractors and motorcycles in seasons of bad rain.

Thanks to good rains received this year, the Indian economy is poised to grow at a rate of 7.5 per cent.

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Topics : #economy | #monsoon

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