The Indian weather bureau has updated its initial forecast for the Southwest Monsoon. In April 2008, the bureau had predicted that rainfall would be 99% of its long term average, plus or minus 5%. The long term average refers to a rainfall of 89 cms. The updated forecasts suggests rainfall to be near normal, and will be 100% if its long term average, plus or minus 4%.
The bureau is also giving a break-up of the regionwise rainfall prediction, showing Central India and North-East India expected to get 101% of the long term average, 98% in the South and 96% in North-West India. The news is favourable as a good monsoon coupled with reports of higher area under sowing this year mean higher agricultural output. Up to June 26, rice cultivation is up 6%, coarse cereals is up 89% (!), groundnut up 78.7%, pulses up by 28%.
Higher agricultural output is not only good for GDP growth, but food prices could become stable and higher farm incomes will do good for spurring demand. But much depends on the rains, whether it will play out as predicted over the rest of the season. There have been occasions in the past, when the monsoon petered out in the second half, or when it was not evenly distributed across the country. Both can lead to a disastrous effect on farm output, which is dependent on rainfall. For the moment though, the news is positive.