India’s GDP growth could rise to 7.9 per cent because of good monsoon so far, with agriculture expected to grow by 4 per cent and consumer price inflation likely to be restricted to 5 per cent in 2016-2017, rating agency Crisil said.
Although the rainfall levels this year have been better than normal, the rainfall has not been well-distributed, leaving some places with surplus rainfall and others deficient, according to the report.
“Going ahead, assuming rainfall is evenly distributed across time and regions, we expect GDP growth to rise to 7.9 per cent, agricultural growth to come in above trend at 4 per cent and CPI inflation to remain contained at 5 per cent in fiscal 2017,” according to the report.
“Excess rainfall in 89 districts across eight States could impact sowing and, therefore, the agricultural output for the kharif season. Therefore, spatial and temporal distribution of rainfall in the second half of the season, especially in August, will be crucial.”
Mapping rainfallCrisil has developed a Deficient Rainfall Impact Parameter (DRIP) index, which measures the impact of rainfall levels on each crop across geographic regions.
“As of July 25, the crop-wise DRIP scores are lower (better) than the average of the last six years. Also, compared with last year, coarse cereals, soybean, groundnut and pulses such as tur are doing better. Even rice, which was slightly worse off than last year as of last week, has caught up and improved.”
The Crisil analysis shows that rainfall was deficient in the middle of June in all regions except for the southern peninsula. However, the situation has dramatically improved since then. “Latest data shows rainfall is normal or above normal in all regions barring the east and northeast, which account for 16 per cent of total food grain production in India,” according to the report. “However, rainfall has not been well distributed,” it said.
