Monsoon Predicted To Be Normal

The monsoon season has been an important and integral part of the Indian economy and growth story. This includes rural growth too. In our earlier update for this year’s monsoon, we had stated that the rains have been deficient so far though according to the latest report from the Indian Meteorological Department (IMD), the deficiency gap seems to have been reduced. As per the data provided by the IMD, for the week June 14 to 20, India as a whole witnessed actual rainfall of 38.10 mm as against the normal average rainfall of 40.10 mm. This implies a departure of about 5 per cent from the Long Term Average (LTA). The report suggests that in the given week, the central and southern regions received better rainfall, thereby improving the average. However, the northwest region continues to wait in vain.

The figures suggest that while central India witnessed actual rainfall of 46.50 mm (40.90 mm of average), the southern peninsula received 50.20 mm (39.40 mm). But the northeast has received only 3.50 mm as against the LTA of 14.10 mm. If we take a deeper look, there are nine regions that have so far received rain in excess while around 11 regions have witnessed normal rainfall and eight regions have recorded scanty rainfall.

If we take a collective view for 2012, India has received total rainfall of 67.40 mm as against the LTA of 90.60 mm – a departure of 26 per cent. The point to be noticed is that in the previous update there was a deficiency of more than 42 per cent. The same has now reduced to 26 per cent. As a result, farming activity will improve and the prices of vegetables and fruits may not shoot up drastically. For this year, the IMD has stated that the rainfall will be 96 per cent of the LTA. The prediction holds out a lot of hope but it is also feared that the El Nino effect may impact the rainfall. However, the bottomline is that a normal season will help curb food inflation and will lead the RBI to undertake a rate cut in its next meeting scheduled for July. This will provide the much-needed impetus to the ailing Indian economy.