Monsoon forecast ‘downgrade’ by IMD: What impact will it have on Indian economy?
With the monsoons improving, India no longer stands as an economy struggling with deficient rains. Now, as per the latest figures from the Indian Metrological Department, the gap has been lowered down to 18 per cent (something around 86% to 87% of the long period average (LPA) with a model error of 4%), which is a welcome sign to say the least.
However, the honorable minister for earth science Jitendra Singh informed that the downgrade forecast was put forward as reconsideration from the last prediction of 93% at the time of beginning of monsoon in the month of June (monsoon was just 43% of the PLA then) , but there’s nothing to fear about for the farming community of India.
“If IMD says that seasonal rainfall is likely to be 87 per cent of LPA, then it’s a drought. By IMD’s standards, more than 10% deficiency in rainfall is classified as drought,” weather forecaster Skymet CEO Jatin Singh told Economic Times.
Nevertheless, if the rainfall remains weak in the month of August as well, northwest areas of the country such as Punjab, Haryana, Rajasthan and Uttar Pradesh can be adversely affected. Also, production of food grains can witness a downfall this time furthering fuelling inflation.
Consumer Price Inflation has increased from 7.97% in July to 9.36% in June owing to food and vegetable prices.
Even CRISIL report has predicted that owing to weak monsoon
Production of coarse cereals namely jowar and bajra, pulses (tur) and soyabean may be impacted.
As production slows reliance on imports will increase leading to increase in fiscal deficit which is already standing at an uncomfortable level.
Media sources claim that NDA government is working on a contingency plan to tackle weak monsoon and increase agricultural infrastructure in increase production. However, it’s still to be seen if the measures really see the light of day or not.