| Light and shadow
April 16: The bleak monsoon forecast for the year ahead is the latest downbeat for the sputtering Indian economy that is projected to grow just 4.4 per cent in 2002-03 — a far cry from 5.6 per cent in the previous year.
Dark clouds loom once again over the economy with the meteorological department’s chilling forecast of “below normal rainfall” across the country in June-September, raising the spectre of a crop failure for the second year in succession and a fall in rural incomes which could once again impact industry’s fortunes.
Finance ministry officials, however, refused to comment on the year’s first monsoon forecast — which is based on a newly adopted model that enabled the meteorological department to come out with its first forecast more than five weeks in advance.
“The new models indicate a 39 per cent probability of below normal rainfall and 21 per cent probability of drought. The probability of above normal rainfall was 23 per cent, 14 per cent of near normal rainfall and 3 per cent of excess rainfall,” IMD director general R.R. Kelkar said here today.
The forecast is a blow to industry which has wilted in the face of a serious demand recession over the past two years that cut a deep swathe through the industrial landscape.
Industry is still hoping that the forecast isn’t as dire as it sounds.
“Bad monsoons will definitely affect the economy, but its severity will be assessed depending on how marginal or massive the shortfall in rain is,” said a senior official with the Federation of Indian Chambers of Commerce and Industry (Ficci).
T. K. Bhowmik, senior advisor (policy), Confederation of Indian Industry, said, “The IMD has set off an early warning system. This should give the government and industry sufficient time to prepare for an impending shortfall in monsoons.”
Assocham’s assistant secretary general D. S. Rawat, said, “It is a very unfortunate prediction for the Indian industry. It will impact the economy because there will be less purchasing power in the hands of the rural masses which will hurt industry.”
“It is still early days,” said Roopa Kudwa, executive director at Crisil, which tracks the performance of companies, industry sectors and the overall economy. “We have to see which regions will face the shortfall and which crops will face the brunt before taking a call.”