Essay on Effects of Uneven Distribution of Monsoon on Indian Economy

introduction

‘Monsoon’ is the word that has originated from the Arabic word ‘Mausam’ which refers to the seasonal reversal of wind direction. In India, south-west monsoons make their arrival in early June till September. This is the period during which India receives maximum rainfall.

The monsoon arrival and its evenness is very important in determining the growth and inflation prospects of the Indian economy in a specific year.

However, in the June and July months of 2015, the rains received were 9 per cent lesser than normal, with sharper shortages in a few regions. Further, according to the Indian Meteorological Department (IMD), rainfall received during August-September months of 2015, the remaining two months of the rainy season would show a poor outcome of 84 per cent.

Rainfall is described to be normal when it ranges between 96 and 104 per cent of the long-term average. Kerala, where the monsoon hits first and has usually witnessed rains much more than the national average, has also seen a deficit rain of 30 per cent this season.

The rains so far have shown uneven distribution, which means while some areas have experienced excessive rainfall and even terrible flooding, other areas have witnessed drier spells. When plotted on a rainfall map, a minimum of 35 per cent of the country’s area shows deficiency of rainfall, while 35 per cent of area has witnessed normal rains. In another 30 per cent area of the country, rainfall has been in excess.

Effects of Patchy Monsoon on Different Aspects

Effect on Growth: It is being projected that by the end of the ongoing year, agricultural growth would get reduced by 5 per cent as compared to the previous year. This will also take away 0.7 per cent percentage points out of the whole GDP growth of India. This will also have an adverse effect on the non-agricultural sector demand in the country.

Effect on Agriculture: India being an agricultural country, about 60 per cent of population is dependent on agriculture for their subsistence and also it contributes to around 16 per cent to the GVA. Thus, the importance of monsoon cannot be ignored. A total of 40 per cent of the cropped area in India is completely dependent on rainwater. For sowing, July is the most crucial month and thus shows the strongest correlation with the production of foodgrain. Although cumulative rainfall is shown to be only 4.1 per cent below normal (till 24 July 2015), it is believed that the shortfall in rains during the first three weeks of July will dampen the production of food grain to some extent. Sowing of rice—the main Kharif staple—has shown a great progress because of good amount of rain received in the northwest which accounts for 29 per cent of total rice production. In states such as Andhra Pradesh and Telangana, sowing of rice has been badly affected. Both rain deficit and uneven distribution of rains have proved to be problems, for example, in West Bengal, sowing of rice got affected due to floods. However, due to poor rains and low reservoir levels in the states of Maharashtra and Gujarat, coarse cereals, pulses and oilseeds suffered drastically. Also deficient monsoon also causes the soil become drier as against normal and leaves lesser water to be used for irrigation. All these factors will lead to lesser production during the Rabi or winter season.

Effect on Rural Demand: In March and April months of 2015, unseasonal and pre-summer rains caused a severe damage to crops in regions already suffering from deficit monsoons. A second year of weak monsoon will cause a decrease in the efficiency of India’s irrigation system and could hit farm production and farmers badly. Already the growth of rural wage has collapsed to around 8 per cent. This will impact the rural demand negatively.

Effect on Food Inflation: Poor monsoon could affect food prices, which have been rising steadily, with retail price inflation reaching quickly to 5.4 per cent in June 2015, compared to a 4.8 per cent hike in April 2015.

Effect on FMCG Sector: A number of detrimental effects can be experienced on the FMCG sector due to poor monsoon. The demand can go down—this can happen mainly in the rural areas—and input costs increase significantly. Currently in rural areas, volume growth in sales of FMCG products is about 11–13 per cent but the weak monsoon may bring it down to 8–10 per cent.

Effect on Power Sector: Because the water levels will be lesser than normal in many hydroelectric dams, lesser electricity will be produced. Across 91 water reservoirs touched 87.09 billion cubic metres (bcm), which got reduced by 13.2 per cent from 100.36 bcm a year earlier and is even lower than the normal 10-year average of 90.68 bcm. During the period of May and June when intense heat is round the corner, rains bring a cooling effect to the regions and when there is less rainfall, the use of electricity will be more than the normal.

Conclusion

Under the present circumstances, a multi-pronged strategy is required to permanently deal with the deficiency of monsoon, this would require finding newer drought tolerant and climate-conducive crop varieties, reducing our dependence on rainfall by strengthening irrigation ecosystem, increasing the opportunities of employment to non-farm poor, bettering skill sets at the farm gate, introducing sea change in farmto- fork transaction chain etc.