Good Monsoon: A Mixed Blessing

Copious monsoon has turned out to be a boon for hydro and wind power segments, while it was a bane for coalbased power and solar plants.

After enduring two consecutive years of drought, the monsoon in India has been recorded as ‘normal’ in 2016, at just 3 per cent below the long term average. The monsoon, which spans from June to September, is said to be normal when rainfall is between 96-104 per cent of the long term (50 year) average of about 88 centimetres. Comparatively, in 2015, the southwest monsoon ended with a rain shortfall of 14 per cent, the worst since 2009. This sends good news to those associated with the country’s agriculture sectors that have been too long in the gloom.

While 2015 was an El Nino year that resulted in weak monsoons and droughts in several regions of the country, 2016 could be termed the opposite - a La Nina year – that will bring bumper harvests due to better rainfall. For the first time in 3 years, rains were well-distributed in the just concluded season. The temporal and spatial distribution of rainfall is crucial in determining its impact on food production. Only 33 per cent of the districts saw deficient rains, compared with 49 per cent in 2015 and 46 per cent in 2014. Importantly, most of the deficient districts are either well-irrigated or not important agriculturally.

After a slow start in June, rains caught up and boosted reservoir levels from the lows seen at the beginning of this fiscal, and provided the much need confidence to farmers. Not surprisingly, area coverage under kharif crops has risen to 1,060 lakh hectare compared with 1,052 lakh hectare last year.

The success of the monsoon will play a vital role in shaping India’s economy. The gross domestic product (GDP) growth, food prices, consumer spending and interest rates are all areas that can be influenced by the rains.

As good monsoon rains reduce the need to use the fuel in irrigation pumps, the demand in the country for diesel and diesel pump sets and engines is said to have nose-dived.