Chasing the Monsoon | business | Hindustan Times
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Chasing the Monsoon

business Updated: Jul 04, 2012 02:04 IST
Zia Haq & Gaurav Choudhury

The south-west monsoon hit Kerala on June 5, beginning its four-month journey across India. Most Indians look forward to the June-September rains for relief from a blazing summer, but the monsoon is more than just a cool respite: it’s the life-blood of Asia’s third-largest economy.

What brings it on?

The monsoon, which spans from June to September, is essentially a reversal of wind patterns: cool oceanic breeze blows over the hot Indian landmass, resulting in rainfall.

It starts over Kerala, its first port of call in the Indian mainland, in the first week of June. The rain-bearing system typically covers the whole of India in a month.

How are rains recorded and the monsoon’s progress monitored?

Scientists can now fairly determine the monsoon’s course and quality. Monsoon is said to be normal when rainfall is between 96% and 104% of 89 centimetres, which is the 50-year average of rains during the season.

Rainfall above 110% would mean surplus monsoon.

Why are the monsoons so important for India?

Two-thirds of Indians depend on farm income and over 40% of our cropped area does not have any form of irrigation other than rains.

Millions of farmers wait for the rains to begin summer sowing of major staples, such as rice, sugar, cotton, coarse cereals.

Half of India’s farm output comes from summer crops dependent on the monsoon. For good farm output, the rains have to be not just robust but also evenly spread across states.

The monsoon also replenishes 81 nationally monitored water reservoirs vital for drinking, power generation and irrigation.

How about this year?

The rains were 31% below average from June 1 to July 2. It was 23% below average till June 27, implying that the rains have lost even more pace over the last one week. The monsoon has affected sowing in Maharashtra, Karnataka, Madhya Pradesh and parts of Uttar Pradesh and Bihar.

How does the government plan to counter the adverse impact of deficient rain?

The agriculture ministry has asked all states to adopt its “contingency plan” — which includes sowing alternative crops that require less water — in case the rains do not improve by July 15. For instance, in Gujarat and Rajasthan the usual coarse cereal crops might be replaced with pulses and oilseeds.

How does monsoon impact the economy?

When rain-dependent farm output is robust, rural income and therefore spending on almost everything — television sets to gold — goes up. This creates demand for manufactured goods, which in turn helps the general economy.

For example, 48% of all motorcycles and 44% of TV sets are sold in rural India. Without this demand, industrial growth would slow down. Normal rains act as a strong check on inflation through plentiful food stocks.

How does deficient rainfall lead to higher prices?

Normal rains act as a strong check on food inflation by increasing food output and availability. A drought instantly puts pressure on prices. Food inflation, if unchecked, can push up core inflation, such as prices of manufactured goods. The 2009 drought resulted in one of the highest generalised inflation levels seen in almost a decade.

Lower food output, a possibility if rains don’t pick up in July — the most crucial sowing month — could knock retail food prices, already high at 10.33%.

How critical are this year’s rains for the broader economy?

India’s farm sector expanded by a moderate 2.8% during 2011-12, compared to last year’s 7% growth, and all hopes rest on this year’s monsoon rains to sustain growth in the economy. Last year, the farm sector grew by 7%.

Adequate rains, apart from acting as a strong check on inflation by boosting farm output, are critical for swift recovery, as India’s gross domestic product slowed down sharply to 5.3% in the quarter ending March, a 9-year low.

A strong farm sector output is critical to bring down food inflation. High inflation limits scope for the Reserve Bank of India (RBI) to cut high interest rates, which hamper business activity by making borrowing costlier. A good monsoon raises rural incomes, which helps the economy by fuelling demand for manufactured items.