The projection came a day ahead of the Reserve Bank of India’s monetary policy, which is widely expected to hold interest rates. But the forecast of a normal monsoon, which might propel farm growth and lower food inflation, will stoke expectations of a rate cut.
Skymet said the monsoon this year could be 100 per cent of the long period average (LPA) with a model error of plus and minus 5 per cent. A normal monsoon is in the range of 96-104 per cent of the LPA. The LPA for June-September rainfall is around 887 millimetres.
The agency also said that there was no possibility of a nationwide drought or deficient rainfall.
It said normal rain was likely, particularly in the eastern parts, while the southern peninsula and parts of northeast India could be at some risk of receiving below-normal precipitation. Skymet said there was a 55 per cent chance of the southwest monsoon being normal this year.
In the last three seasons, actual rainfall was below Skymet’s April forecast in 2015 and 2016, while it got the forecast correct in 2017.
Farm and allied sector growth is officially estimated to more than halve to 3 per cent in 2017-18, against 6 per cent in the previous year. Retail price food inflation is already going downhill. It fell to 3.26 per cent in February from 4.70 per cent. Though monsoon rains are forecast to be normal, experts and market watchers discounted the forecast as being too early and preliminary. “It is a good initial indicator of the monsoon in 2018 but I feel it to be too preliminary to make any firm prediction on how it will affect the agriculture sector or the economy this year. Also, the distribution of the monsoon rainfall holds the key rather than the overall quantum, which we would know only near June and July,” said Madan Sabnavis, chief economist at CARE Ratings. He said the rainfall distribution would be crucial in judging how it would impact the economy and the RBI, too, could take a call closer to actual rains. Skymet said monsoon rainfall in June would be 111 per cent of the LPA with 30 per cent chance of it being normal.
India receives around 164 millimetres of rainfall in June.
July rains are expected to be 97 per cent of the LPA with 55 per cent chance of them being normal. The country receives around 289 millimetres of rainfall in July, which is also the highest in the four-month monsoon season. The month is also crucial for sowing of most kharif crops.
In August, Skymet said the country might receive rainfall equivalent to 96 per cent of the LPA, with a 55 per cent chance of rainfall being normal. About 262 millimetres of rainfall is received in August. In September, rainfall of around 101 per cent of the LPA is expected with 60 per cent chance of it being normal. India receives around 173 millimetres of rainfall in the last month of the monsoon season.
The southwest monsoon is critical not only for agriculture growth, as less than half of the cultivable land is under irrigation, but also boosts the general economy. A good monsoon helps boost prospects of a kharif harvest and helps rejuvenate reservoirs and groundwater sources critical for rabi crops. Almost 70 per cent of India’s annual precipitation comes in the months of June to September. The 2017 southwest monsoon season saw below-normal rainfall at 95 per cent of the LPA, against the India Meteorological Department (IMD) forecast of normal rainfall at 98 per cent of the LPA with a model error of plus and minus 4 per cent. Skymet had predicted a below-normal monsoon in 2017.
The monsoon last year was off to a steady start in June and July but took an extended break in August till early September, which pulled down the total cumulative seasonal rainfall. Though around 216 districts in the country received deficient rainfall in 2017, governments of Chhattisgarh, Madhya Pradesh and Rajasthan that cover 270 tehsils in 52 districts had officially declared drought and had sought financial assistance of over Rs 110 billion from the Centre.