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Having failed to make headway with the cease-fire, the Centre is now trying to talk peace on Kashmir, internally through its negotiator K.C. Pant and externally with Pakistan's Chief Executive General Pervez Musharraf. But will anything come out of this?

Good Monsoon
So What?
The traditional link between the monsoon and the economy weakens.

Slippery Deal
The ONGC subsidiary's whopping Rs 8,136 crore investment was signed in indecent haste.

ECONOMY: MONSOON

Good Monsoon So What?

For good and bad, the rain god's hold on Indian agriculture is waning, weakening the traditional link between the monsoon and the economy

It's a bit of a damp squib. Sure, the Indian Meteorological Department (IMD) has forecast that 2001 will once again be a normal monsoon year. Sure, it will be the 14th consecutive year that there won't be a drought. Sure, this should boost agricultural production and rural demand, stimulate industrial recovery, and propel the Indian economy into a higher-than-6-per cent growth orbit. But then why aren't farmers, businessmen and economists ecstatic about the prospects of an economic turnaround?

Well, for good and for bad, it does not quite work that way in the new Indian economy. For proof, look no further than the pattern of agricultural production in recent years: in four of the past six years, it has registered a fall. The monsoon was normal in all these years. In the past two years, 1999-2000 and 2000-1001, the agricultural output has shrunk continuously. That demolishes the assumption of a correlation between a good monsoon and good agriculture. More significantly, it implies that the traditional linkages between the monsoon and the economy-good rainfall leading to good crops, leading to higher rural incomes, leading to higher demand for products and services, leading to higher employment and income-are weakening.

But what really is a normal monsoon? For sticklers of definition, if the rainfall during the four months of June to September averages between 79.2 and 96.8 cm (88 cm plus/minus 10 per cent), it's described as normal by the IMD. Technically termed the southwest monsoon, the season accounts for almost 80 per cent of the total annual rainfall in the country. By this definition, the monsoon has undoubtedly been normal every single year since 1988.

There are two inherent limitations of this definition. It is the distribution of rainfall over time and space and not merely the total volume of rain during the season that determines the agricultural production. The IMD's forecast doesn't throw much light on these aspects. Statistically, a combination of excess and scanty rainfall in different regions of the country could average out to normal monsoon for the country as a whole. That's exactly what has happened in many of the normal monsoon years since 1988. In 1999 and 2000, for instance, more than one-third of the country's cropped area was rain deficient (see chart). In fact, 71 of 569 districts have been reeling under drought for two years. This includes some of the major agricultural regions like Madhya Pradesh (32 districts), Rajasthan (26 districts), Gujarat (16 districts) Uttar Pradesh (nine districts) and Haryana (eight districts). In contrast, some regions of Andhra Pradesh, Bihar, West Bengal and Himachal Pradesh were severely flooded due to excessive rainfall last year. Yet, by definition, the country had a normal monsoon.

Little or no attention is paid to what is called the northeast monsoon that becomes active over southern India between October and December. Tamil Nadu and parts of Andhra Pradesh get up to 60 per cent of rainfall in these months. Last year, the northeast monsoon was abysmal, with 31 out of 35 meteorological divisions in the country having suffered rain deficiency. Says Ashima Goyal, professor at Indira Gandhi Institute for Development Research: "The big picture of a normal monsoon masks the small images of subnormal rains in different parts of the country."

Don't mistake this for a semantic debate on definitions. A more accurate definition and forecasting of monsoon will make monsoon a real arbiter of economic fortune in India, especially because over 60 per cent of Indians live in rural areas.

On its part, the IMD is trying to improve forecasting techniques. Since 1999, it has started disaggregated monsoon forecasts dividing the country into three broad regions. It also continuously changes and modifies the 16 parameters used to arrive at a forecast. According to S.R. Kalsi, the deputy director general of IMD, attempts are also on to develop forecasting models to predict district-wise monsoon. Difficult undoubtedly, but if and when such forecasts are made available the correlation between the strength of monsoon and health of the economy will become stronger, and easier to establish.

"The demand-pull effect of a good monsoon has waned."
-Arun Bharat Ram, Former President, CII

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