The India Meteorological Department (IMD) forecast says that there will be 97% normal monsoon for the year 2018-19, which could be a good news for the rural economy that suffered due to the twin impact of drought years and demonetisation.
This year will be the third year for the normal monsoon with very less chance of rain deficit, IMD said.
“Very less probability of deficient monsoon,” IMD DG KG Ramesh said after the forecast. “The moderate La Nina conditions developed in the equatorial Pacific during last year started weakening in the early part of this year and currently have turned to weak La Nina conditions,” IMD said in a statement.
La Nina is a weather pattern that brings equatorial Pacific Ocean temperatures, rainfall patterns and winds closer to average. Good rains will prompt the planting and harvest of crops such as rice, corn, cotton and soybeans.
While monsoon is expected to be normal for the third year in a row, normal rainfall this year really matter for the rural economy as the country this year is expected to overcome the disruptions caused due to drought in 2014-15 and 2015-16 and demonetisation in 2016.
A recently-launched index by Bloomberg, which looks for early indicators of the health of India’s rural economy, shows that when India’s rural economy was on the cusp of recovering from the perils of two consecutive drought years, demonetisation struck another body blow.
But now that good rainfall is predicted for the year 2018-19, it will help rural economy look up and most importantly, just ahead of the 2019 election year.
Monsoon rain is a life for the agriculture-intensive Indian economy. Besides, bring good news to the agriculture sector, it is also instrumental in keeping inflation in check and may help agri-related companies as well.
IMD defines average, or normal, rainfall as between 96 percent and 104 percent of a 50-year average of 89 cms for the entire four-month season beginning June.
India witnessed a series of protests by farmers across the country that suffered due to the drought, which made the government subject to criticism for not being able to provide relief to the agriculture sector.
The protest marches by farmers demanding compensation to crop loss made some states announce loan waivers, which the RBI governor warned has fiscal implications and should be avoided.
“Good monsoon projection for 2018 and government’s focus on the rural sector through measures such as free cooking gas cylinders and electrification is helping the rural economy show growth revival,” Abhishek Gupta, India Economist, Bloomberg LP, told FE Online in a recent interaction.>