The Indian Meteorological Department on Friday said this year's monsoon will be 96 per cent or near-normal.
"The monsoon has reached Ratnagiri over the country's west coast. It will remain there for the week before moving on. This year's monsoon will be 96 per cent normal, with an error margin of 5 per cent," Indian Meteorological Department director B P Yadav said.
The department will start giving out regional forecast starting from the third week of June, he added.
Economists and agricultural experts said this will be good for the economy. "A normal monsoon is always good for the economy. Although the Indian economy has over the years becoming increasingly insulated, it still remains that if agriculture does well, the economy does well," chief economist of Aditya Birla Group Ajit Ranade said.
The agriculture growth rate was almost 5 per cent in 2007-08 and 3 per cent for 2008-09. "If they are saying it (the monsoon) is going to be 96 per cent it will be really good. Even if it is 90 per cent (the met department has an error margin of plus or minus 5 per cent) then we can hope to achieve 4 per cent growth rate. It will be good for the rice and pulses industry," M J Khan, director of the Centre for Agriculture and Rural Development, said.
He added that the money that is pumped into the central agricultural and rural development schemes will reap full benefits this year.
"It will also mean that we will achieve the target for food security. In fact, we will have adequate food security earlier than the target deadline," Khan said.
A good monsoon will also help other industries in parts which are dependent on monsoons, Ranade added. "In those parts of the country, it will indirectly help other industries too. And a good monsoon will be a booster for the hydroelectric industries and will also take care of the water requirements of the industry in those regions. Therefore in all, a good monsoon will have a positive effect on the economy," he said.
On the government's welfare schemes, Ranade said: "We believe that we are a domestically dependent economy. The increase in the rural purchasing power might have helped our economy survive global recession. Schemes like loan waiver and NREGS (national Rural Employment Guarantee Scheme) might have helped, but we don't know how much each of them contributed individually because the total expenditure on these was huge while the fiscal deficit was around Rs 3.3 lakh crore ($70 billion)," he said.
Combined with the fact that the slowdown in India is showing perceptible signs of revival, a good monsoon will also be great news for the agro-based industries. "With the recession continuing, a lot of Western countries will not be able to increase subsidies. They will be at the same existing rates. So, a good monsoon will provide our export industries with a chance to increase their competitiveness," he said.
