Monsoon could end dry spell for UPA government

A normal June-September monsoon, as is expected, could be crucial for the UPA government ahead of a general election in 2014, helping it focus on growth, while curbing inflation and keeping its borrowings in check.

Sufficient rains would help India escape a drought for a fourth straight year. The monsoon is critical for the economy, as two-thirds of Indians depend on farm income.

The India Meteorological Department is slated to make its official monsoon forecast on April 26. The South Asian Climate Outlook Forum, a grouping of regional weather bureaus represented by India, has predicted average rains. Agriculture minister Sharad Pawar, after discussions with the Met department, has also said he expected the rains to be normal but a "clearer picture" would emerge by May.

Despite a normal forecast last year, the monsoon was weak, recovering towards the end.

Government expenditure tends to rise during election years, according to a Credit Suisse analysis of past elections. Deficit rains could worsen the fiscal deficit by necessitating costly drought-fighting measures, such a cheaper power.

The government expects growth to improve from a dismal 5% year-on-year in the financial year ending March 2013 to 6-6.7% during 2014, aided by a normal monsoon and falling inflation, according to the annual economic survey.

A drought, which cuts food output, could stoke inflation, which fell to 6% in March, its slowest pace since 2009.

Poor rains could damp voter mood. With good rains, spending by rural consumers on manufactured items, such television sets and gold jewellery, goes up, boosting factory output.


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