ECONOMY

India Set For A Third Normal Monsoon: IMD Forecast

This will only be the second time in the last two decades when the country will get three consecutive years of good monsoons, said DK Joshi, chief economist at rating agency Crisil. “This is the first piece of good news as the past year was badly hit by the pandemic, and this year too we have a second wave of infections. Amid all this, the good monsoons will help provide nutrition and also support rural gross domestic product,” he said.

Joshi, however, cautioned that it will be important to watch if the monsoon is evenly spread geographically and spatially during the year, which would be important for agriculture output.

“The states of Maharashtra, Rajasthan, Chhattisgarh and Jharkhand with relatively lower irrigation cover will also be key determinants on how monsoon would help agriculture growth in the country,” Joshi said.

In 2020-21, based on the government’s second advance estimates, gross value added for the agriculture sector will grow 3% compared to a 6.5% contraction in GVA across the economy. This growth comes atop 4.5% GVA increase in agriculture in 2019-20.

An evenly spread monsoon between June-September and across the country will be important, said Devendra Kumar Pant, chief economist at India Ratings and Research.

“Considering agriculture was one of the key drivers for GDP growth in FY21, if the rainfall is good this year, this will provide support to demand. This will not just be positive from the farmers’ and rural income prospect, but will also propel demand in the economy and support growth in the allied sectors such as tractors, steel, food-processing, pesticides, fertilisers and irrigation companies,” Pant said.

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