Showers of relief or angst? Crucial season arrives

All eyes are peeled on the south-west monsoon, which has debuted in Kerala and the north-east.

Healthy, timely and well-distributed rains can lift agriculture incomes by bolstering rural demand, which was impacted in the past fiscal and is currently showing some signs of revival.

Robust crop output can control food inflation that has been hovering above 8% for six months. Combating food inflation, with non-food inflation already being low, can provide policy room for interest rate cuts.

Hence the need to track monsoon forecasts closely. As more information becomes available over the next few weeks, CRISIL’s Deficient Rainfall Impact Parameter (DRIP) index will be employed to closely assess the impact of rains on states and crops after accounting for irrigation vulnerability.