The war in West Asia does dominate sentiment as it has affected the markets perceptibly on a daily basis. The economy has held on quite well, which is commendable. But there is another factor playing in the background which will come to the forefront in the next couple of months—rainfall. This will probably be the most important factor which will determine the growth path this year, as it will guide both consumption and investment.

Monsoon forecasts and El Nino concerns

The two main agencies which track and forecast the monsoon are the IMD and Skymet. The IMD has predicted that rainfall will be 92% of normal, while Skymet expects it to be 94%. While this is a preliminary forecast, the final shape will be known from June onwards. But there is acknowledgement of the prevalence of El Nino this year, especially in the second half of the monsoon. This is a phenomenon when temperatures rise to high levels, affecting the monsoon winds. This can pose challenges for the agricultural sector.

Dependence of agriculture on rainfall

Almost 40-45% of the kharif crop is dependent on rains, and this is what makes it critical for the prospects of agriculture. Here, too, the northern states appear well irrigated and, hence, will not have an issue if the monsoon is sub-normal. The coastal regions normally do get adequate rainfall even when the monsoon is below par. However, it is the interiors that are more vulnerable even when the monsoon is normal, as the winds at times do........

© Free Press Journal