The monsoon is a lifeline of the Indian economy. Being an agrarian economy, agriculture contributes around 16 per cent to the country’s GDP. Most of the farmlands in India are rain fed and directly depend on the monsoon for a good yield. Good cultivation would mean higher farmers’ income and higher purchasing power, which in turn would boost consumption in the rural economy. On the other hand, deficit rainfall would reduce crop production, decrease farmers’ cash-flow and increase food inflation.
India receives rain under the influence of the Southwest Monsoon and Northeast Monsoon. The southwest monsoon enters India through Kerala on June 1 every year.
Since 2000, India received deficient rains in 2014 and 2015, which considerably reduced agriculture production, effecting prices of essential commodities and spiking inflation. From 2016, the country has been receiving normal monsoon rains, bringing relief to the agriculture sector.
The Indian Meteorological Department (IMD) in its first monsoon forecast for 2018 released in April projected rainfall to be 97% of LPA (Long Period Average from 1951-2000 is 887 mm) with an error of +/-5%. On the other hand, private forecaster Skymet Weather said monsoon would be 100% of LPA. According to IMD, if the total rainfall is less than 90% of the LPA, it is considered as a drought year while 90-96% of the LPA is considered below normal rainfall. Rainfall in the range of 96%-104% of the LPA is considered to be normal, 104-110% of the LPA is above normal, and more than 110% of the LPA implies excessive rainfall. As per IMD, monsoon will reach Kerala on May 29.
Though India is a leading producer of commodities, not all farm commodities are dependent on the monsoon. Kharif sowing activities for grains, cereals, pulses, oilseeds, cotton and sugar coincides with the monsoon season. But some of these are also imported. Yet, the country awaits the monsoon and hopes for a good distribution, which would decide the fate of many in India.
The author is a fundamental research analyst at Karvy Comtrade Limited