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Rediff.com  » Business » Risks to growth up on rains delay: CMIE

Risks to growth up on rains delay: CMIE

June 09, 2003 12:39 IST
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The delay in the current year's monsoon rains has heightened uncertainty over India's economic growth and pushed up the risks of a drought, according to a leading independent forecaster.

"Prospects for an economic recovery in 2003-04 suffered a blow as the southwest monsoon failed to hit the Kerala coast on June 1," said the Centre for Monitoring Indian Economy in its monthly bulletin for June, made available to Reuters on Monday.

The country's main southwest monsoon hit northeastern India on June 5 and brought the first showers to Kerala on June 8. The rains usually hit Kerala on June 1 before proceeding inland to key farm states further north.

"In the past 40 years, there have been only six instances of the rains being delayed. Of these six, five were followed by a fall in agricultural production," CMIE said.

CMIE said even the country's weather office had forecast that the June-September monsoon, which is key to agricultural output and growth in the farm-dependent economy, would be below the long period average.

"Water levels in the major reservoirs were only 65 per cent of the 10-year average and seven per cent lower than the year-ago level as of end of May 2003," the forecaster said.

Economic growth in Asia's third-largest economy slowed in the year to March 2003 because of a crippling drought, which was the worst in 15 years.

India's economy expanded by 4.4 per cent in 2002-03 (April-March), sharply down from 5.6 per cent a year earlier.

India has set a target of six per cent growth in the current fiscal year.

The farm sector contributes about 25 per cent to gross domestic product and around two-thirds of the country's billion-plus population depend on the sector for a living.

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Source: REUTERS
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