April 18, 2017 / 10:49 AM / 4 months ago

FACTBOX - Monsoon's impact on Indian economy

School girls walk barefoot as they cross a waterlogged road during rains in Kolkata, July 25, 2016.Rupak De Chowdhuri/Files

India's crucial monsoon rains are expected to be average in 2017.

CLASSIFICATION

An average or normal monsoon means rainfall between 96 and 104 percent of a 50-year average of 89 centimetres during a four-month season from June, India's weather office says. Rainfall below 90 percent of the average is considered a drought.

Even if rains are average, some areas could still have drought. On the other hand, rains of more than 110 percent of the average would mean an excessive monsoon -- not as damaging as drought but potentially hurting yields of lentils and rice.

ARRIVAL

The monsoon season starts with the arrival of the rains on the southern Kerala coast around June 1. Its progress triggers planting of summer crops.

PROGRESS

After hitting the south coast, it takes about a week to cover the coffee, tea and rubber growing areas of south India. It spreads to the rice areas of eastern parts in the first 10 days. It usually covers half of the country in the first fortnight and enters the oilseed-producing areas of central India in the third week of June. Cotton areas in the western region get rains by the first week of July. It covers the entire country by mid-July.

Crops planted in June and July contribute half of India's farm output. The summer rains also influence winter crops, such as wheat and rapeseed, grown in irrigated areas that depend on reservoirs filled by the rain.

Here are some facts on the monsoon and its impact:

CROPS

RICE: Farmers sow paddy at the start of the monsoon in June and the key areas are in the east and south. The crop is heavily dependent on rains for irrigation.

OTHERS: Corn, lentils, oilseeds and cotton -- important crops in western and central India -- have some dependency on the seasonal rains. India remains a net importer of lentils and cooking oils and domestic output can alter overseas purchases.

ECONOMY AND MARKETS

-- The monsoon rains are vital for farm output and economic growth in India, the world's second-biggest producer of rice, wheat, sugar and cotton. Farm sector shares for about 15 percent of India's nearly $2 trillion economy, Asia's third biggest.

-- India is largely self-sufficient in major foodgrains such as rice and wheat, but drought can send the country to global markets. In 2009, India had to import sugar, sending global prices to record highs and pushing up inflation.

- Higher farm output would rein in food prices and help the government to take steps to cut the fiscal deficit and farm subsidies.

-- By lifting farm output, the monsoon boosts rural incomes, pushing up sales of everything from consumer goods to cars. Higher demand from rural consumers, who form two-thirds of the population, gives critical impetus to growth.

-- Monsoon rains impact demand for gold in India, as purchases get a boost when farming incomes rise amid high crop output.

IRRIGATION, POWER

-- Monsoon rains replenish reservoirs and lift ground-water levels, allowing better irrigation and more hydropower output.

-- Higher rainfall can cut demand for subsidised diesel, which is used to pump water from wells for irrigation and makes up for about 40 percent of India's oil products demand.

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