" The fiscal consolidation programme, while delayed, may compensate in quality, especially if state governments…
NEW DELHI: India’s crucial monsoon rains are expected to be above average in 2016, the weather office said on Tuesday, easing fears over farm and economic growth after two straight droughts hit rural incomes and agricultural output.
Rains in 2016 would be 106% of the long-term average, Laxman Singh Rathore, chief of the India Meteorological Department, told a news conference.
Rathore said the monsoon rains could be above average as El Nino – a warming of the eastern Pacific Ocean that can lead to dry spells in South Asia – is fading and giving way to La Nina in which the same waters cool.
The July-to-September monsoon delivers 70% of India’s annual rainfall. It is critical for the country’s 263 million farmers and their rice, cane, corn, cotton and soybean crops, as nearly half of its farmland lacks irrigation.
Bumper rains can spur farm and economic growth and boost rural demand for gold, cars, motorcycles, refrigerators and fertiliser. Two-thirds of India’s population depends on farming for its livelihood.
Plentiful rains could also encourage the Reserve Bank of India to cut interest rates after the central bank this month eased its repo rate by 25 basis points to its lowest in more than five years.
“If indeed we end up having a better-than-normal monsoon, and spatial distribution of monsoon and production indicators point to a normal year, then the RBI’s comfort for another rate cut will increase,” said Gaurav Kapur, senior economist at Royal Bank of Scotland in Mumbai.
A normal or average monsoon means rainfall between 96% and 104% of a 50-year average of 89 cm during the four-month season from June, the weather office says.
Two straight years of drought in India – for only the fourth time in over a century – have sparked anger among farmers against Prime Minister Narendra Modi.