Clouded Conjectures

From the finance minister to the farmer toiling in a field, everyone invokes the gods of rain. Nearly seven decades after independence, the fate of the Indian economy is intimately connected with the monsoon. With less than half the country’s cropped area having access to irrigation, the India Meteorological Department’s (IMD) forecast of the current monsoon being 6% above the long period average has generated considerable optimism. It is argued that higher agricultural output will boost rural demand which would provide a stimulus for higher growth. However, fundamental macroeconomic indicators do not inspire such confidence.

Agriculture, which still employs nearly half of the country’s labour force, is estimated to have grown only 1.1% in 2015–16 against a decline of 0.2% in the previous year. In 2015–16, there was negligible growth in foodgrain production: from 252 million tonnes to 253 million tonnes, far below the 265 million tonnes produced in 2013–14. An above-average forecast does not mean that rains would bring relief uniformly. Even in a year of excess rainfall, regions in the country could experience inadequate precipitation. The IMD predictions for this year are for the entire country; the forecasts are not region-specific.