ExplainSpeaking: Monsoon 2023 starts with a deficit: What is the likely impact?

As the India map shows, large parts of India have experienced “deficient” (orange colour areas) and “large deficient” (yellow colour areas) in the first fortnight of June. Overall, the monsoon is 37% below the long period average (LPA). “Deficient” areas (orange) received anywhere between 20% to 59% less than LPA while “large deficient” (yellow) refers to rainfall being even lower.

The LPA of rainfall, according to the India Meteorological Department (IMD), “is the rainfall recorded over a particular region for a given interval (like month or season) average over a long period like 30 years, 50 years etc.” In other words, the LPA is an average level of rainfall received by an area and its calculation is based on data over many decades. The LPA acts as a benchmark while forecasting or assessing the rainfall in a particular season.

How crucial is this deficit? Will it derail the monsoon in 2023?

Both the main forecasters — the IMD and Skymet — believe rainfall is going to catch up in the second half of June.

But even if it stays in the deficit, past analysis suggests that a deficit in June does not necessarily ruin the whole monsoon performance.

As the TABLE 1 alongside (sourced from a Nomura research note written by Mihir P. Shah and Anshuman Singh) shows, over the past 20 years (i.e. 2002-22), there have been 10 instances when the kickstart to monsoon was weak, with the month of June receiving rainfall below its LPAs. However, in seven of the 10 instances, the monsoon season was normal with good recovery in rainfall during the months of July and August.

What is the likely impact on the Indian economy?

The first impact of a deficient monsoon is through the delays in sowing of Kharif crops. Nomura reports that there has been a delay but it is not alarming.

“In 2023, the agriculture season witnessed some delay in rabi harvest in April; the delayed onset of monsoon has also resulted in some delay in the sowing of kharif crops. While the kharif sowing data for the first fortnight of June is much below 2022 levels (SEE CHART 1), sowing activities are expected to pick up over the next 3-4 weeks with normalcy in monsoon conditions,” it notes.

The second big concern when monsoon falters or gets delayed, is about the water reservoir levels since they need to support irrigation. On this count, India is well-placed. As CHART 2 shows, the reservoir levels are above the 10-year average.

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Eventually, a poor monsoon first affects the rural economy and consumption levels. As things stand, the rural economy is still struggling when it comes to consumption levels. That is why monsoon rainfall is so critical for the fortunes of India, especially rural India.

Until tomorrow,

Udit