Monsoon in India affects foodgrains, not the economy

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By Aihik Sur

CHENNAI: With the monsoon just days away, hopefully, agriculture minister Radha Mohan Singh has ramped up expectations that food production is poised to break last year’s record of 273.8 million tonnes and thereby lift whole Indian economy. But does the southwest monsoon have such a leveraging effect on the economy?

A look at figures down the years shows that the monsoon indeed has a direct impact on food production but its influence on the country’s growth rate is tempered by other variables like industry and services. However, by and large, the old socialist-era dictum that the monsoon is India’s lifeline, by and large, holds true.

A big deficit in rainfall invariably leads to a dip in food production. We had a 19 per cent deficit monsoon in 1979-80 and food production dipped from 131 million tonnes to 109 million tonnes. Conversely, a copious monsoon inevitably leads to an uptick in farmers’ fortunes. In 1988-89, India had 19.3 per surplus rain and it produced a jump of 29 million tonnes in foodgrains.

In 2009, India experienced a cruel drought with a rainfall deficit of -22 per cent. Consequently, foodgrain production decreased by 6.8 per cent from 234.47 million tonnes the previous year to 218.11 million tonnes.

India had a sequence of droughts during 2001-2003 and this led to a precipitous fall in food production by 38.08 million tonnes, dipping to the lowest level in 20 years, 174.77 million.

However, the figures show that all it takes is one normal or good monsoon to arrest the slide in food production. Last year’s record food production of 273.38 million tonnes came on the back of a normal monsoon (-3 per cent deficit) after a sequence of two bad monsoons in 2014-15 and 2015-16.

However, the impact of the monsoon on food production does not translate into a similar correlation with overall economic growth. That is because India’s economy is not as agriculture-based as it used to be in the first few decades after Independence. And the contribution of industry and services has increased due to the advent of globalisation.

For instance, in 2011, which had a normal monsoon with 105 per cent rainfall, India clocked up a growth rate of 6.64 per cent but in 2015, which was a drought year with a monsoon deficit of 14 per cent saw the country growing at 7.57 per cent.

Again in 2009, the year of the big drought, India’s growth rate spurted from 3.8 per cent to 8.48 per cent.

As the Central Statistical Organisation explained in a publication, “The growth rate of 8.0 per cent in the GDP during 2009-10 has been achieved due to high growth in transport, storage and communication (15.0 percent), community, social and personal services (11.8 percent), financing, insurance, real estate & business services (9.2 percent), and manufacturing (8.8 percent).”

The overall conformation of India’s economy has changed much since the when the monsoon used to be the single most decisive factor. The share of the agriculture and allied sector in India’s economy stands at 17.32 per cent in 2017 as opposed to 51.81 per cent in 1950. The services sector contributes 53.66 per cent of india’s GDP.  In the 1950s, it accounted for just about 30 per cent.

Source: The New Indian Express

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