CRISIL Insight: Monsoons- 2009 situation yet again?

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Prof. P. Saravanan

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Jul 31, 2012, 1:12:45 AM7/31/12

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Dear all,

PFA the CRISIL Insights on Monsoons.

Best Regards,

Saravanan

Subject: CRISIL Insight: Monsoons- 2009 situation yet again?

A brief overview:

The Indian monsoon, till July 18, 2012, has been almost 22 per cent deficient — similar to the level in 2009, an all-India drought year. Scores from CRISIL’s proprietary Deficient Rainfall Impact Parameter (DRIP) show that the deficient monsoon so far this year will have a similar impact on agricultural output as it did during the 2009 drought. (The DRIP scores measure the impact of deficient rainfall on agricultural output in India.)

The deficient rainfall has hit acreage and could hit yield of Kharif crops, affecting growth in agricultural output. Rain-fed crops have been worst affected: coarse cereals, oilseeds and pulses. Farm output has been hit the hardest in Gujarat, Rajasthan, Maharashtra, Karnataka and Madhya Pradesh. The fact that poor states (Rajasthan and Madhya Pradesh) with a high dependence on agriculture have been affected is likely to increase the government’s fiscal burden. The lower farm output will exacerbate the already high food inflation.

Rainfall during the following months will need to be closely monitored: only a bounce-back in August and September can brighten the grim scenario for Indian agriculture.

Corporate

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