India Rainfall Still Deficient By 15 %

On the occasion of India’s 65^th Independence Day, our Prime Minister gave a very encouraging speech about India Growth story.  However during the whole speech he also indicated towards one Factor which is playing evil at current levels. Yes, higher inflation which is not only impacting the common man but has also impacted India Inc as a whole as the GDP growth is getting impacted.  Even for the month of July the WPI Inflation stood at 6.87%. Though it is bit lower than 7.25 % in June and 7.55 % in May 2012, it is still higher than comfort level of RBI.

Naturally there is immediate need to bring the inflation downwards.  However one factor as stated by the Prime Minister has played a spoilsport. And that factor is monsoon.  Monsoon this year has not only been deficient but also has been disperse or scattered. About the deficient monsoon, as of 15^th August 2012 India has witnessed a total rain of 498.60 mm. This is around 15 % lower than Log term normal average of 588.60 mm.

The shortfall in the rain has actually resulted in higher food prices. This is clearly visible from the fact that food inflation has consistently remained above the double digit mark. Even for the month of July the food inflation stood at 10.06 % against the 10% in June 2012.

Yes, situation is quite bad on the monsoon on regional front also. Whole India is divided into 36 regions and around 13 regions have witnessed deficient rains. Deficient rain indicates a decline of -20 % to 59 %. Areas like Keala, Tamilnadu and Some part of Maharashtra which are rice belts, have witnessed deficient rains. Further there are 3 regions which have witnessed scanty rain (-60% to -99 %).  The worst part is the green belt like Haryana and Punjab witnessed scanty rains.  With the rains situation not expected to improve much going ahead, we feel the situation on inflation (especially in food inflation) may get worst. These are major food growing regions and the impact would be higher.