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    Rain check: Time for Modi government time to start praying

  • Date : 03 July, 2018

     In an election year with polls scheduled for the Lok Sabha and several agrarian states, a bad monsoon could mean a turn in fortune for the ruling National Democratic Alliance (NDA).

     
    Though it is too early to declare the monsoon as poor, initial signs do not augur well for the rural economy, which is already under distress. Although rainfall in June was 95 percent of the long-term average, it has been erratic with a two-week break in the middle of the month that impeded its progress over central and north India. That, in turn, seems to have impacted crop sowing.
     
    Data from the department of agriculture shows sowing of major crops at the end of June stood at 16.5 million hectares, 15 percent lower than the average of the last seven years.
     
    Oilseeds are the worst affected. Planting has taken place in only 200,000 hectares compared to an average of 1.3 million hectares. Politically, this doesn’t augur well for the ruling party since poll-bound Madhya Pradesh accounts for a significant portion of oilseed production.
     
    The pattern is the same in other crops. Pulses sowing is 40 percent below average, groundnut, 50 percent, and soybean, 60 percent. Rice sowing in Punjab is also reported to be 40 percent below average.
     
    Although this is only the beginning of the season, and typically only 10-15 percent of sowing is done by this time, these signs are disturbing. The importance of agriculture cannot be overstated, both in terms of politics and economics. The sector contributes about 18 percent of the gross domestic product and 70 percent of the population (and vote bank) are dependent on agriculture for a living.
     
    The agriculture sector in term is dependent on the June-September monsoon because it delivers about 70 percent of India’s annual rainfall. A good monsoon is important for transplantation and development of soil moisture, which decides the yield and resistance to pest attack in future. Drought years in 2014 and 2015 are one of the primary reasons for the farmer distress in recent times.
     
    Rainfall over the next few weeks is thus critical not only for the agriculture sector but for the economy as a whole because of its role in boosting income and consumption.
     
    Secondly, with rising oil prices and a falling rupee, the last thing that the economy needs is a poor rainfall which will push up inflation and prompt the Reserve Bank of India to increase interest rates. For the government, if there ever was a time to invoke the gods, it is now.
    Source:moneycontrol.com
 















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