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If rains fail, govt must arrest slide in rural incomes

india Updated: Jun 15, 2015 00:41 IST
HT Correspondent
HT Correspondent
Hindustan Times

Policymakers have no control over fickle weather whims and complex forecasts. Regardless of the eventual course and quality of the summer rains, the early predictions do give an early heads up of what is likely in the next few months.

Yet, every drought year, India’s response to deal with the scanty summer rains has been knee-jerk, marked by lack of preparedness. For the second successive year, the monsoon is likely to be below normal.

The India Meteorological Department’s (IMD’s) 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. Many have raised questions about the accuracy of IMD forecasts.

For instance, in 2009, when India had its worst drought in decades, the IMD had predicted a normal monsoon.

Already, India has had to contend with a reduced winter harvest on wheat output and a slew of other food crops. The probability of a poor monsoon is due to a brewing El Nino, a weather glitch marked by higher-than-normal Pacific temperatures.

Risks of a food-prices spiral are somewhat higher this summer, when the impact of unseasonal rains is expected to be felt. According to analysts, vegetable prices could increase by 20-30% in the next three months, pushing retail food inflation up to 10% by June. Early weather alerts are aimed at helping governments and farmers prepare for any eventuality.

The most tangible impact of deficient rain is felt through higher inflation as crops get affected because of reduced supplies, raising final prices of food items. Already, India’s consumer price inflation edged up to 5.01% in May. This could worsen in June if the current trend in high vegetable prices continues.

Dipping farm incomes could leave the Centre vulnerable to sharper Opposition attacks. When the rains fail, fewer people are engaged on farms. This in turn brings down rural wages.

It is critical to arrest the slide in rural incomes by announcing schemes or measures, even if these are one-off in nature. For instance, a higher wage under the MGNREGA, as a one-off measure in a crisis year, can keep rural wages going even if there were fewer jobs on farms.

The movement of the rain clouds over the next few weeks will clearly hold which way the food prices and rural income trend lines are headed this year.