Gone are the days when monsoon rainfall prediction would immediately impact markets""both commodities and, to an extent, shares. This is borne out by the cool, if not wholly indifferent, manner in which the markets have taken the India Meteorological Department (IMD) forecast of monsoon rainfall in the ensuing season: 93 per cent of the long-period average of 89 cm. Apart from reflecting the maturity of market understanding (forecasts have been wrong before), such a response is also indicative of the growing resilience of the Indian economy vis-à-vis the monsoon. Economic growth is now driven more by the services and other sectors than agriculture, whose overall contribution to gross domestic output has dropped to barely a fifth. Besides, the impact of the monsoon on crop output is perceptible only when it comes to the kharif crops grown on unirrigated tracts""these are usually low-value crops like coarse cereals""and not so much on the rabi crops which account for almost half of crop production. The situation changes dramatically if monsoon failure causes a serious drought that dries up irrigation and drinking water sources. | |
| This aside, the IMD's long range monsoon forecast is not taken very seriously for another reason as well: it conveys inadequate information about the monsoon's performance. In its present form, it indicates only the total expected rainfall in the country as a whole during the four-month monsoon season from June to September, without a hint of its spread over time and space. Both these are critical variables. As such, the forecast does not leave much room for drawing worthwhile conclusions, and less for assessing its economic impact. Information about the distribution of rainfall will be forthcoming from the IMD only around mid-July, by which time the monsoon season would be almost half-way through. This is a lacuna which the IMD and the department of science and technology that controls it need to look into. Weather agencies in other countries have displayed far better forecasting competence. Admittedly, the IMD is trying to refine its prediction models but, even while doing so, it would benefit by seeking meaningful collaboration with agencies that have a better forecasting record. |
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| So far as this year's projection (93 per cent of long period average rainfall) is concerned, it can be viewed as both good and bad news. For, if the actual rainfall turns out to be 5 per cent higher than this at 98 per cent, it would be statistically as well as practically normal. But, if the shift is in the opposite direction and rainfall settles at 88 per cent of the average, the scenario will be wholly different. Thus, we have a situation in which agriculture departments at the Centre and in the states should be prepared with contingency crop plans, and with the physical inputs and know-how required to put these plans in practice, should the need arise. Otherwise, the system could well be caught napping. |
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