Amid drought, hope rests with the monsoon.
After two consecutive years of poor rainfall, which have nurtured the drought in parts of India and diminished farmers’ incomes, the early forecast is that this year’s rains could bring relief.
On Tuesday, the India Meteorological Department (IMD) made its first forecast for the season. It predicted an above-average amount of rain.
According to the IMD, this year’s monsoon rainfall is likely to be 106 per cent of the 89 centimetre average for 1951 through 2000.
Monsoon season starts in June and lasts until September.
The IMD’s model forecasts “El Niño conditions to weaken to moderate-to-weak levels during the first half of the monsoon season”, which should drive rainfall.
It has said that the drought-hit Marathwada region in Maharashtra is expected to receive good rainfall, along with most regions.
Analysts said that the impact of good monsoon rainfall in India this year would be significant.
“If the forecast pans out, this will provide much-needed relief to the rural, agriculture sector in terms of agri output. It also augurs well for the inflation outlook,” wrote Edelweiss, a financial services company based in Mumbai.
Poor rainfall leads to a reduction in crops, which results in price rises.
“While a detailed forecast of regional and monthly distribution of rainfall will be issued in June 2016, the IMD indicated that rainfall will be well-distributed across regions including central India, which is highly monsoon-dependent.,” Edelweiss said. “The northeast region, however, may receive below-normal rainfall.”
Analysts at Crisil, a research house that is based in Mumbai and is part of Standard & Poor’s, said that that “assuming a normal monsoon, an uptick in the rural economy will drive consumption” in the financial year to the end of March.
It added that a normal monsoon would result in inflation averaging at about 5 per cent, which it said was “corroborated by the IMD’s rainfall forecast for the 2016 southwest monsoon”.
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