A normal June-September monsoon is critical this year as it will help keep the NDA government’s focus on growth while curing inflation and borrowings and boosting rural incomes.
Predictions of an El Nino – a weather pattern that is known to roil the monsoon — again have cast a cloud on the summer rains. The monsoon is critical for the economy, as two-thirds of Indians depend on farm income. It also replenishes over 80 nationally important reservoirs, crucial for power and drinking.
Since a good monsoon not only offers relief from a harsh summer, it also impacts key sectors of the economy, inflation and income. It is widely awaited by virtually everyone — from farmers to policymakers alike.
India’s agriculture is already roiling from a series of weather shocks, resulting in both the last summer and winter seasons to perform badly. “A third consecutive bad agricultural season (lower output) could severely impact rural incomes, force the government to announce higher Minimum Support Prices (MSP) and possibly push food inflation temporarily higher,” a research note from Japanese brokerage firm Nomura said on Thursday.
The rain-bearing system traverses the country in its fourth-month journey, setting off in the Kerala coast on June 1. They typically cover half the country by the first week of July. About half of the country’s total farm output comes from crops grown during summer.
A normal monsoon is critical for rural prosperity, which in turn fuels demand for goods. This boosts manufacturing, helping the overall economy to expand.A patchy monsoon hits farm income. Rural spending on most items goes up with plentiful rains. A sharp rise in rural consumer spending explains why India’s countryside is crucial to keep the economy expanding. For instance, rural buyers account for close to half of the country’s annual motorcycle sales.