The relationship between monsoon and economy is too cozy for comfort, as witnessed year after year. The reasons are many – good monsoon raises rural demand for goods and services leading to economic growth, it boosts farm output keeping food prices down. A good monsoon has a finger in every economic pie.
This year, even as India is suffering one of the worst summers, the Meteorological Department Director General Ajit Tyagi’s statement that the country will receive normal rainfall in 2010 produced the same effect as a summer rain.
Last year, the country suffered severe drought, which dented the economy’s good performance. Though economy emerged relatively unscathed from recession with an impressive growth percentage, the country is still suffering the aftereffects of one of the worst droughts. Issues like shortage of food grains, uncontrolled price rise and double-digit inflation are rankling the government.
Mr. Tyagi’s statement is based on previous experience that a drought year doesn’t follow another drought year. He said that out of the 20 droughts the country has experienced in the past, 17 were followed by near-normal monsoons.
The impact of this statement is profound. A normal monsoon would, in one stroke, wipe out the problems faced by the country and set the economy on a higher growth trajectory.
Mr. Tyagi added that there are clear indications of weakening of El Nino phenomenon, which is encouraging. He said that by year-end, the reverse phenomenon of La Nina could develop. Geneva-based World Meteorological Organization (WMO) had last month stated that El Nino has peaked and its effect will continue only till mid-year, ultimately vanishing.
The heat wave conditions prevalent in many parts of the country also augur well for good monsoon. The Meteorological Department will issue its monsoon forecast in the coming days.
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