A good monsoon?

The projection of a normal monsoon this year is a reassuring augury for the country's economy as it looks ahead to a new financial year and continuation of rapid growth. Optimism on the monsoon's performance, albeit prefatory for the present, is based on fairly sound logic as meteorologists have captured signs of the development of La Nina in the Pacific Ocean. La Nina, the opposite of the dreaded El Nino, which often causes erratic monsoon rainfall, is known to be associated with good performance by the south-west monsoon. How well La Nina will grow this year will be known only after a couple of weeks, but its very emergence is a welcome development as it rules out any danger of El Nino surfacing. If La Nina grows as one would wish it to, it will ward off any danger of a poor monsoon. For, there has not been a single instance of a sub-normal monsoon in a La Nina year.

However, it is necessary to be cautious while gauging the impact of the monsoon on the performance of the country's agricultural sector, and indeed on the economy as a whole. These depend on many other, mostly intertwined, monsoon-related factors and not just the overall quantum of rainfall and its distribution over time and space. Indeed, the economy has of late tended to display signs of resilience vis-à-vis the performance of the agricultural sector, and of the monsoon. The GDP growth numbers of the last and the current financial years are cases in point. Monsoon rainfall had been quite erratic, marked by prolonged dry spells and excessive downpours, in both these years. Perceptible damage was inflicted on crops, property and human and animal lives by these vagaries of the weather. But GDP has clocked handsome growth rates of 7.5 per cent and 8.1 per cent in these years. The growth rates of agricultural GDP, on the other hand, have been modest at 0.7 per cent and 2.3 per cent, respectively.

However, what is notable here is that the composition of "agriculture and allied sectors" has changed dramatically over the years. Thus, agricultural GDP growth no longer reflects largely the outrun of field crops alone. In fact, the share of these crops has dropped to below 48 per cent (2003-04) of the sectoral total, with subsidiary sectors like livestock, fisheries and horticulture becoming more important. Livestock alone contributes nearly 25 per cent of "agricultural" GDP, and both fisheries and horticulture have been growing faster than foodgrain output. Many of these sectors, obviously, do not require much rainfall to fair well. To that extent, the GDP of the broad "agriculture and allied sector" can be said to have acquired a degree of resilience against the uncertainties of the monsoon.

Having recognised this, the significance of the largely monsoon-supported hydrological cycle should not be under-estimated. It eases farmer anxiety, especially in the rainfed areas where there has been widespread distress when crop failure occurs, and quite a few suicides. Also, the rabi output is now as large as the kharif crop, and relies largely on the availability of ground and surface water resources, which, in turn, have to be replenished annually by the rains. A good crop also assures strong rural demand for a range of products and services. Moreover, the monsoon also matters for hydel power production, navigation and water-based tourism and sports, besides meeting the needs of the industrial and domestic sectors. That is what reflects the true significance of the monsoon.