Monsoon 4% below normal so far; could revive over central, North India from Monday

Met department says showers may revive from Sept 12 onwards over the central and northern parts of the country

The southwest monsoon, which has gone into a lull over many parts of central and northwest India triggering talks of its withdrawal over the next few weeks, has so far been four per cent below normal since June 1.

In Kerala, the southwest monsoon this year has been 30 per cent below normal, while in parts of Gujarat it has been 25 per cent below normal.

In Punjab and Himachal Pradesh, the rains have been 20 per cent below normal so far. With the rains entering their last leg, it is unlikely there could be any big improvement in their performance.

The Met department in its latest forecast said showers might revive from September 12 onwards over the central and northern parts of the country.

"Rainfall is likely to be normal to above normal over east and northeast India and south peninsula on many days during next two weeks. It is likely to increase over many parts of central and adjoining north Peninsular India from 12 September onwards and light rainfall also likely over northwest India from 12 September onwards," the Met department said.

The monsoon has been rather weak over most parts of the country except east and North-East India. The rains over central India have been three per cent more than normal, while that over northwest India has been two per cent above normal, while over south and east India and North-East India, it has been so far around 11 per cent and 14 per cent less than normal.

The showers took a break and have been marginally below expectations because of continuing neutral conditions of El Nino (as against expectations of it being negative).

The Madden Julian Oscillation and Indian Ocean Dipole, two other weather conditions which impact the monsoon in India, have also been negative, contrary to expectations.

The good showers so far have filled most reservoirs particularly in western and northern India and according to the latest update from the Central Water Commission, the water levels in 91-odd reservoirs was around 108.104 BCM, which was 69 per cent of the full capacity.

The reservoir levels were 117 per cent of last year's levels and 97 per cent of the 10-year average level during the corresponding period.

The strong monsoon also pulled up kharif sowing across the country, with the area under pulses reaching record highs, easing inflation concerns.

Till last week, the total acreage under kharif crops was over 102 million hectares, almost five per cent more than last year.

Meanwhile, research firm Barclays in its latest weather report said a favourable monsoon is likely to boost agriculture sector output in the coming months and also ease food inflation.

Accordingly, the firm expected retail inflation to soften during H2 of 2016, with likely multiple sub-five per cent readings.

On the monetary policy front, the Reserve Bank of India maintained a largely accommodative stance at its August meeting, while emphasizing its focus to support banking system liquidity, as needed.

"As such, we expect the central bank to cut the policy rate by 25 basis points in Q4 16, taking the rate down to 6.25 per cent by the end of 2016," Barclays India said.