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Resource centre on India's rural distress
 
 

Weather department downgrades monsoon forecast to 88%, stokes drought fears; govt 'prays'
-Hindustan Times

India’s June-September monsoon, the lifeblood of Asia’s third-largest economy, will most likely be “deficient” this year with the met department downgrading its forecast from 93% to 88%, earth sciences minister Harsh Vardhan said on Tuesday.
 
The India Meteorological Department’s (IMD) revision -- which had forecast “below normal” monsoon in April -- will potentially toughen challenges for the Narendra Modi government already battling a farm crisis triggered by unseasonal rains in March-April this year.
 
The arrival of the monsoons has already been delayed in the country’s southern tip, Kerala, by about four-five days and large parts of the country experiencing a searing heat wave which has left near 2000 people dead.
 
“Let’s pray to God that the revised forecast does not come true,” Vardhan said, implying how much the annual rains mean for the government and the country already spooked by fears of the weather phenomenon, El Nino.
 
El Nino, meaning ‘little boy’ in Spanish, is caused by a warming of sea-surface temperatures in the Pacific, triggering dry spells in southeast Asia.
 
Rainfall of less than 90% is considered to be a drought year.
 
The latest prediction, however, has an error margin of 4 percentage points either way.
 
The government expressed concerns about a below-par monsoon after the Reserve Bank of India, taking advantage of subdued inflation, cut interest rates for a third time this year on Tuesday.
 
“Prices of essential commodities have already started rising and they will rise further if the monsoon remains deficient as forecast by the government,” said Harish Galipelli, head of commodities and currencies at Inditrade Derivatives and Commodities.
 
“It’s not good news for the farming community that is under distress. Last year, their harvest was affected by poor rainfall and unseasonal rains. This year’s drought will deepen their problems.”
 
Anger is growing in the countryside after unseasonal rain and hailstorm ravaged farms earlier this year, pushing many debt-laden farmers to suicide.
 
Dipping farm incomes could leave the NDA government vulnerable to sharper opposition attacks, especially from the Congress, already on battle mode over the controversial land acquisition bill.
 
The rains are vital not only for agriculture and rural incomes but also the broader economy.
 
Should the rains be patchy, industrial expansion tends to sputter too, since nearly half of most consumer items – from cars and TV sets to gold jewelry – are bought by the rural consumers.
 
A poor monsoon could also mean the Modi government would have to concentrate on mitigating its effects by pumping in more money, taking the focus of policymakers away from reforms.
 
The rain-bearing system, that typically begins its four-month journey across India on June 1 in Kerala, is also crucial for power, drinking and irrigation. A bad monsoon hits power production since hydropower accounts for a quarter of India’s electricity output, critical for industry and households alike.
 
Drought-like conditions fan food prices, often worsening shortages of items such as pulses, onions and cooking oil.
 
An advanced government estimate of winter output made before the recent unseasonal rains had already projected a 2.6% decline due to effects of a late drought. A poor monsoon could further trim harvest of major crops, such as rice and soya bean, pushing up food prices.
 
According to the Met department’s simulation, which is not part of the official monsoon forecast, drier conditions are set to be more acute in the grain-bowl northwest and central India, compared to the south and northeast.
 
The government has stockpiles of staples such as rice, wheat and sugar from bumper harvests in the last few years but it has limited means to control a jump in costs of fruits and vegetables that have the largest impact on food inflation in India.