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Due to the weak progress of the southwest monsoon, sowing of Kharif crop has been lagging this year. India’s overarching dependence on rainfed irrigation means a poor monsoon can hit the economy and GDP growth. Mint explains the problem:

What is the monsoon season for India?

The southwest monsoon winds blow from the Arabian Sea and Bay of Bengal to north India during June-September, while the northeast rains blow from northeast India to the southwest in October-November. The southwest monsoon usually reaches Kerala by 2 June, Mumbai by 9 June and Delhi by 29 June. Rainfall is normal when it is between 96% and 104% of the long period average or LPA (averages of rainfall received over a 50-year period between 1951 and 2001), deficient when it is less than 90% and ‘above normal’ when it is between 104% and 110% of the long period average.

How crucial is the monsoon for India?

Monsoons are the lifeblood of Indian farming. As much as 51.2% of farms in the country are rainfed, while the irrigated area accounts for 48.8%. The southwest monsoon is crucial for the cultivation of Kharif crops and early rainfall is critical for the planting of cotton, pulses, rice and oilseeds such as soyabean. Monsoons have a close linkage with India’s agricultural production. With around 50% of our total food output being summer crops, a delayed monsoon can hit the supply of foodgrains and other farm products such as vegetables and fruits and even impact food inflation.

Worrying signs
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Worrying signs

What is the current year’s trend of the monsoon?

The overall rainfall for June was above normal (9.6% above the LPA); however, it turned deficient from 21 June (30.2% below the LPA). As of 25 June, only 20.3 million hectares had been sown under Kharif crops, as against 25.9 million hectares in June 2020. As of 16 July, with 57% of the total Kharif area being sown, it was still 11.56% lower than July 2020.

What does it mean for the Indian economy?

Agriculture’s share in India’s GDP was 19.9% in FY21. The agriculture and allied products export market was $41.25 billion. Agriculture’s share in wholesale and consumer price indices is 13.98% and 32.96%, respectively. Thus, supply shortages of farm produce could lead to higher inflation. Agro-based industries like sugar and cotton are affected by monsoons. With the rural economy insulating the overall economy during many crisis situations, FMCG, fertilizers, seeds and tractors depend on the agri performance for demand.

Why are policymakers interested in rain data?

With monsoons contributing 89 cm out of 116cm of rain every year, changes in arrival and intensity are monitored by policymakers. The Centre devises policy measures for food safety, including imports, price stability and buffer stock, and financial assistance, i.e. farm credit, insurance cover, etc. The RBI works out monetary policy factoring in expected inflationary pressures and credit policy. India Inc’s marketing plans rely on the impact of rains on rural income.

Jagadish Shettigar and Pooja Misra are faculty members at BIMTECH.

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