The India Meteorological Department’s prediction of a below normal south-west monsoon this year is in line with predictions already made by a number of international weather agencies.
IMD sees the probability of the monsoon being 95 per cent of the normal rainfall for the season, with only 35 per cent chances for its being normal. This is mainly because of the possibility of the El Nino phenomenon occurring this year. There is warming of the waters of the Pacific Ocean which is considered to have an influence on rainfall in south and south-east Asia. The severity of El Nino will determine the extent of shortage of rainfall. As of now there are only signs of the emergence of El Nino but meteorologists expect there is a more than 60 per cent chance of it developing.
Monsoon behaviour does not have as much impact on the country’s economy now as it once used to have. Much of agriculture is still dependent on it but the farm sector accounts for only 12 per cent of the economy. But large numbers of people are engaged in the sector. A five per cent rain shortfall is not very extra-ordinary. Some beneficial effects of last year’s good monsoon will also continue. Grain production was at a record high last year. Food stocks are at the highest levels. Reservoirs have adequate water levels and so irrigation and power production may not be affected. Many areas have retained their soil moisture and can cope with some rain deficit. The pattern of spatial distribution is an important factor in the impact of the monsoon. Temporal distribution also has a role. These are too early to predict now.
Yet a below par monsoon is a matter of worry. A decline in farm output can cause food prices to go up and further stoke inflationary pressures. It will dissuade the RBI from lowering the interest rates which is seen as necessary to give a boost to the industry. The expectations for a marginal growth in economy may not be fulfilled. The fall in rural incomes can hit demand in certain sectors like consumer goods and agriculture-oriented industry. The new government which assumes power after the elections will have to immediately take steps to meet the challenges arising from a deficient monsoon. It will have a twin task: first to mitigate the impact on agriculture and then to minimise the consequences for the overall economy.
