It’s official now that the monsoon will be above normal this year, according to the first forecast of the monsoon by the Indian Meteorological Department. The stock markets, fair-weather friends, were the first to cheer, with the Sensex soaring 481 points. Coming on the same day that the figures for industrial production, which rose two per cent in February, and the declining retail consumer price index were released, all point to days of relief ahead, if not actually the “achche din” that Prime Minister Narendra Modi has promised. The government and other authorities need to build on what is there.
A good monsoon will change the life of rural India, which has been in distress for the last two years due to the failure of two successive monsoons and the cut in funds allotted to the crucial Mahatma Gandhi National Rural Employment Guarantee scheme. The MGNREGA funds and man-days of employment have been increased following the intervention of the Supreme Court. The government will now have to ensure that farmers get loans, good seeds, and on time, for sowing. Most of the farmers are in debt and will not get bank loans to buy seeds, fertilisers and other farm needs. If the monsoon is plentiful and equally distributed across India, it means good crops, a rich harvest and income that will put purchasing power in the hands of the farmers and rural labourers. This is good news for the consumer goods, personal care, affordable lifestyle product and soft drink sectors, as well as for makers of two-wheelers, tractors, farm equipment, etc. Agriculture growth could add four to five per cent to GDP.
The government will have to assure the farmers that they will get remunerative prices and will not be beaten down by imports which are done to depress domestic prices. The powerful sugar lobby, for instance, has succeeded in getting the government to impose a 40 per cent duty on sugar imports so prices remain high. The government never does this for edible oils and pulses, which don’t have a strong lobby or a spokesperson like Sharad Pawar who is only concerned with sugar as the sugar barons are his constituency.
The economy is showing signs of a turnaround with the effects of the earlier reforms and schemes starting to bear fruit. There are a host of bills waiting to be passed in this session of Parliament, due to reconvene towards the end of this month. It is in the hands of the government to get the crucial Goods and Services Tax passed in Parliament.
