Are the rain gods finally changing their stance on India?
Look at the data and you would want to believe they have. Bountiful rains in July has wiped out the deficiency in June. In June the defecniency was 11 percent, but July witnessed a 7 percent excess. Thus the accumulated deficiency of June got wiped out.
There is more good news. IMD expects the next two months to see a good rainfall. August will see a "normal" rainfall while September is expected to witness "above normal" precipitation, said a PTI report.
"Rainfall over the country as a whole during second half of southwest monsoon season (August and September) is most likely to be above normal. Quantitatively, the rainfall for the country as a whole during second half of the season is likely to be 107 period of Long Period Average. The rainfall during August is likely to be 104 plus/minus 9 per cent of LPA as was forecasted in June," the IMD has said.
Overall, the government seems to be entering its next lucky phase. First was when the crude oil prices fell, helping the RBI and government to bring the inflation under control.
This time, if the rains are bountiful, food inflation, which has reared its head of late, can be reined in. Moreover, the much-needed demand push from the rural economy will realise boosting the overall growth of the economy. Remember, the rural sector has been in the tatters for the last two years due to the drought that the country experience two years back to back.
Already there are signs of better days for the agriculture sector.
According to Religare analysts Jay Shankar and Rahul Agrawal as of 29 July, the area sown for kharif pulses has shot up 41 percent on year to 11 million hectares. They note that this is higher than the area sown for pulses in the entire kharif season in each of the last three years.
"A spike in prices of pulses (owing to the sharp decline in production over the last two years) led to the surge in sowing. Thus, India is likely to witness healthy growth in the output of Kharif pulses, which would help cool pulses inflation (hovering at 20%+ over the last one year)," they note.
Meanwhile, the cereals acreage rose 3.3 percent on year and that of oilseeds 8 percent.
"This is a positive development, given that output of Kharif cereals/ oilseeds had fallen by 3.2%/ 13.5% YoY to a five-year low in 2015," they note.
However, it is too early yet to say this is going to be a turnaround year for the rural economy. There are dry patches that continue to haunt a broadbased rural recovery.
According to IMD, until 31 July, nearly 21 percent of the country has received "deficient" rainfall.
The data shows deficiency has reached 49 percent in Saurashtra and Kutch region followed by Gujarat region (39), Himachal Pradesh (27), Assam and Meghalaya (26), Nagaland, Manipur, Mizoram, Tripura and Kerala (25) and Odisha (20).
However, regions such as Vidarbha and Marathwada, which faced acute drought crisis due to two consecutive droughts have received normal rainfall so far.
Moreover, will one year of normal or above normal monsoon offset the negative impact of two consecutive drought years? Experts have warned it will not. Nonetheless, the government can expect a booster shot for the economy with the normal monsoon, the reform push and 7th Pay Commission implementation.
With PTI inputs
Data contribution by Kishor Kadam