This will only be the second time in the last two decades that the country will experience three consecutive years of good monsoons, said DK Joshi, chief economist at the rating agency Crisil. “This is the first good news as last year was badly hit by the pandemic and we have a second wave of infections this year as well. Amid it all, the good monsoons will help improve diets and also support rural gross domestic product, ”he said.
However, Joshi cautioned that it will be important to observe that the monsoons are evenly distributed geographically and spatially throughout the year, which would be important for agricultural production.
“The states of Maharashtra, Rajasthan, Chhattisgarh and Jharkhand with relatively low irrigation cover will also be important determinants of how the monsoons would support agricultural growth in the country,” Joshi said.
Based on the government’s second forecast, gross value added for the agricultural sector will increase by 3% in 2020-21, compared to a 6.5% decrease in gross value added for the economy as a whole. This growth equates to a 4.5% increase in gross value added in agriculture in the period 2019-20.
An evenly distributed monsoons between June and September and across the country will be important, said Devendra Kumar Pant, chief economist at India Ratings and Research.
“Given that agriculture was one of the main drivers of GDP growth in FY21, this will support demand if rainfall is good this year. Not only will this have a positive impact on the income prospects of farmers and rural areas, but it will also fuel demand in the economy and support growth in related sectors such as tractors, steel, food processing, pesticides, fertilizers and irrigation companies, “said Pant.