Monsoon disappoints, brace up for hard times
This monsoon season we are likely to get up to 10% less rain than a normal year, according to the latest indications from the Met department. If that shortfall was evenly spread across the country, the impact on the nation’s agricultural output and the farmers would have been limited. Unfortunately though, large swathes of farmland in Maharashtra, Gujarat, Rajasthan and several parts of north India, especially the bread basket region, have received very little rain. Even if these areas get good rains in the coming weeks, it is unlikely that farmers will make up for the loss caused by the delay in Monsoon and the slow buildup so far. A contraction in farm output, which scaled a new high last year, cannot be ruled out.
The news of a possible drought couldn’t have come at a worse time. We may have to bear with double-digit food inflation for many more months to come. Consumer demand that has weakened over the past two quarters would only get worse as farmers face a squeeze on their incomes and the global economic environment deteriorates further. The latest update on the United States is that the world’s largest economy and India’s biggest trading partner is teetering on the brink of a recession. Americans don’t see new jobs come their way over the next two quarters and their economy’s growth prospects will only get subdued as Washington gets into the thick of presidential election. There are no signs of an immediate turnaround in Europe, where incidentally an IMF-led team landed in Greece on Tuesday to assess the impact of the $10-billion bailout package the debt-ridden country receive earlier.
With a gloomy global economic outlook and, back home, a drought appearing imminent, there is little to cheer so far as the India story goes.
No matter what the government says it has neither the cash nor the political will to act and stem the slide.
From here on, the ride will only get bumpier. That we are headed for hard times would be an understatement.