Normal monsoon will bring country's economy on right track

At a time when all negative news are pouring in due to the second wave of Covid-pandemic, the Met Department's forecast of a normal monsoon this year is quite encouraging. If it happens so, country's economy can easily be brought back on right growth path.

In its first weather forecast on Friday, the Indian Meteorological Department (IMD) said that the country is headed for a third straight year of normal monsoon. For starters, India will be having a normal south west monsoon seasonal rainfall this year.

The forecast of a normal monsoon, at 98 per cent of long period average (LPA) +/- 5 per cent, comes as a big relief, given the early rise in temperatures and the reservoir storage that is trailing the year-ago levels by a margin of 8 percentage points. Nevertheless, the temporal and spatial distribution of the monsoon rains will remain crucial. As of now, we expect the agricultural GVA to report a moderate growth of 2 per cent in FY22, following two years of above average rainfall and healthy output expansion, says an Icra report. A normal pattern of monsoon rainfall should also help rein in food inflation, although the global trend in the prices of edible oils, as well as domestic demand-supply disruptions for perishable items such as vegetables, will continue to play a critical role.

So, one can assume that this year, we will see either normal or above normal rain for most parts of the country for States like eastern and north-eastern parts, some parts of Odisha, Jharkhand, Bihar, Assam and Meghalaya. Surprisingly, a major part of the country is expected to have a normal or above normal rainfall.

Of course, good monsoon will support rural gross domestic product. Anyway, it comes with a rider. The monsoon has to be evenly spread geographically during the year. Otherwise it may prove to be fatal in terms of human life and agricultural output too.

Going by the government's second advance estimates, gross value added for the agriculture sector for the year gone by will almost halve at 3 per cent from 6.5 per cent contraction in the previous fiscal, which is a healthy sign of economic progress.

While maintaining a status quo on the key policy rates early this month, RBI Governor Shaktikanta Das had observed that going forward, the food inflation trajectory will critically depend on the temporal and spatial progress of the southwest monsoon in its 2021 season.

Private sector weather forecaster, Skymet has made it clear that its prediction of a normal monsoon has a 60 per cent chance of being true. There is a 15 per cent chance of above-normal rainfall, a 15 per cent chance of below-normal rainfall and a 10 per cent chance of excess rainfall during the season. Let's pray for a normal monsoon which may act as a rescue for the otherwise battered economy.