Forecast of good monsoon would be a great mood changer for the industry, as revival of rural demand leads to a turn in the investment cycle.
Zee Media Bureau
New Delhi: After two consecutive years of poor rainfall in many parts of the country, good monsoon will not only benefit agriculture and farmers but will give a boost to India's economy.
India Meteorological Department (IMD) Director General Laxman Singh Rathore said there are 94 percent chances of country receiving "normal to above normal" rainfall while there is only 1 percent probability of "deficient" rainfall.
Commenting on the IMD forecast, CII Director General Chandrajit Banerjee said an above normal monsoon would help economy in achieving 8 percent growth.
"The prediction would be a great mood changer for the industry, as revival of rural demand leads to a turn in the investment cycle. This would take the economy to a higher trajectory of around 8 percent growth," he added.
After two consecutive years of drought, the prospect of above normal monsoon would help bolster farm productivity, alleviate rural distress, boost rural incomes and consumption demand even while augmenting food supplies and keeping inflation under check, he said.
"The prospects of normal monsoon along with subdued global commodity prices would keep retail inflation within the 5 percent mark which in turn should help the RBI to retain the dovish stance towards monetary policy and open up the door for further easing of policy rates during the current year," Banerjee added.
The farm industry is bullish on the agriculture sector growth in view of IMD's forecast of above normal monsoon after two straight years of drought.
India's agriculture sector, which employs about 60 percent of the population and contributes around 15 percent of the country`s gross domestic product, is largely monsoon-reliant.
Agri-input companies including fertilisers expect good sales during the kharif season to begin with the onset of southwest monsoon from June onwards.
Sugar industry body ISMA sees revival of sugarcane crop in drought-hit cane growing states Maharashtra and Karnataka, while edible oil industry body SEA said that any increase in domestic output of oilseeds would cut import of edible oils.
"It is good news. After a couple of years of poor monsoon, India will get better rains especially in Maharashtra and Karnataka, where water in the reservoirs are currently at its lowest. We expect revival of sugarcane crop in these parts of the country," Indian Sugar Mills Association (ISMA) Director General Abinash Verma said.
Mumbai-based Solvent Extractors Association (SEA) Executive Director B V Mehta said oilseeds area and production will increase if there will be good rains in the country.
Asked if edible oils imports will reduce if domestic oilseeds output jump, he said, "It is too early to project if imports would come down. But higher domestic production will definitely check the rise in imports."
Fertiliser Association of India (FAI) Director General Satish Chander said better monsoon will increase sowing area and eventually push sale of fertilisers. Good monsoon will help farmers and overall agriculture economy, he added.
Dhanuka Agritech Group Chairman R G Agarwal said, "Forecast of a good monsoon this year is a good sign of revival for the troubled agriculture sector.
With Agency Inputs