The India Meteorological Department’s (IMD) forecast of an above-normal monsoon is expected to drive higher agricultural production and rural demand, while helping to keep inflation under control, according to a Crisil report released on Wednesday.
The IMD has predicted above-normal rainfall during the southwest monsoon season (June to September), estimating it at 106 per cent of the long-period average (LPA).
“If the forecast—which would mark the second consecutive year of an above-normal monsoon—comes true, the economy could expect another year of healthy agricultural output, strengthening rural demand, and keeping food prices in check,” the report states.
In fiscal year 2025, gross value added (GVA) in the agriculture and allied sectors grew by 4.6 per cent, outpacing the decadal (fiscal 2015–24) average of 4.0 per cent. Similarly, consumer price inflation (CPI) fell sharply in the March quarter of fiscal 2025, owing to healthy food supplies that curbed food inflation. The positive trend continued in April, with CPI inflation dropping further to 3.2 per cent. These trends are likely to persist if the rainfall matches the forecast, the report notes.
A healthy temporal and regional distribution of rainfall is essential for balanced agricultural growth. The IMD forecast indicates that June is most likely to see above-normal rainfall across the country (over 108 per cent of the LPA). This would buck the trend of the past three seasons, which saw below-normal rains in June, and bodes well for sowing activities and the replenishment of water resources, the report adds.
According to the IMD, Central and South Peninsular India are most likely to experience above-normal rainfall, while Northwest India is expected to receive normal rainfall during the overall monsoon season. Only Northeast India is likely to witness below-normal rains.
However, the report also cautions that adverse climate events—such as excess, deficient, or unseasonal rainfall, heatwaves, cyclones, and floods—during and after the southwest monsoon season must be closely monitored.
For instance, in fiscal 2025, while adequate rainfall supported foodgrain production and helped contain inflation, vegetable output suffered due to erratic weather. About 41 per cent of the food inflation during fiscal 2025 was driven by rising vegetable prices caused by weather-related disruptions such as heatwaves and excess rainfall in certain areas, the report highlights.
IANS