The government should, by now, know the ways of the met department. When it predicts a normal monsoon, in all likelihood it doesn’t mean it. When has it predicted the rains correctly?
The government has, on its part, started preparing a contingency plan, a report in the Economic Times said. “We expect a good monsoon this year, resulting in a bumper crop. But we are also ready with our contingency plans in case of deficient rains,” Agriculture Secretary Ashish Bahuguna, was quoted as saying in the report.
The delayed and insufficient monsoon is adding to the mounting worries of the government, which is already under attack for high prices and policy paralysis.
A week into the season, the rains are 36 percent below normal, according to a Reuters report.
This is a concern, as most crops need heavy showers at the beginning of the rainy season, said agricultural experts in a report in the Economic Times.
In the south, where the rain hits first, it has been as much as 58 percent below normal.
Agriculture accounts for only 15 percent of the economy. But the role the rains play in boosting the economic activity is significant.
“To conclude a poor monsoon would not have a definite impact on overall GDP, given agriculture’s declining share, is not correct. Particularly, this year, when overall economic growth is expected to be sluggish,” Ramesh Chand, director of the National Centre for Agricultural Economics and Policy Research, was quoted as saying in a report in the Business standard.
The RBI’s higher interest rate and the government’s policies would not be of any help to bring prices down, if the rain gods do not shower their bounty.
And, distribution is the key, not the overall rainfall.
(curtsey : first post)
Rupesh Yatesh Dalal
Head Research Department
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