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Monsoon – Lifeline of the Indian Economy

Author: Veeresh Hiremath/Wednesday, April 17, 2019/Categories: Exclusive

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Monsoon – Lifeline of the Indian Economy

The monsoon season has been the lifeline of Indian economy. The saying “Indian agriculture is a gamble with monsoon” underlines the importance of monsoon in India. Every stakeholder associated with the Indian agriculture from farmers to policymakers look forward to normal monsoon every year. A normal to above-normal monsoon flourishes the growth of the economy in terms of GDP, labour market, housing sector etc.

Agriculture in India is the major source of livelihood for around 60 per cent of the population. The Southwest monsoon rainfall season is the major factor on which Indian agriculture and also its GDP depends up to a considerable extent. It plays a very important part in the production of food crops as well as non-food crops.

The Indian agriculture is predominantly divided into two seasons — Kharif and Rabi. Kharif session coincides with arrival of monsoon rains in India and more than half of the food crop production takes place in this season.

Every year during the month of April people from across the country including farmers and industrialists’ wait for the first forecast of monsoon as it affects prices of various agri commodities in India. As expected, the Indian Meteorological Department (IMD) has released its first monsoon forecast report on April 15,  2019.

Considering various climatic parameters, the IMD has predicted near normal monsoon report during monsoon season 2019, which starts from June and ends in September. In quantitative terms, monsoon rainfall is likely to be 96 per cent of Long Period Average (LPA) with model error of +5 per cent. As predicted earlier, the possibility of an El Nino condition is expected to weaken during the monsoon season. The second forecast report will be released in first week of June 2019. Consequent to IMD forecast, another weather forecasting agency Skymet had projected below normal monsoon and quantitatively rainfall is expected to be 93 per cent of LPA.

Soon after release of monsoon forecast report, all agri commodities which are grown during the kharif season has declined owing to increased acreage and production following normal monsoon forecast. However, the concern would be on actual rainfall and its distribution in key producing regions of the country.

The author is head of research, Karvy Comtrade

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