With India receiving its highest amount of rainfall in 44 years in the month of August, the storage levels in 123 of its main reservoirs has significantly risen to 102% of the level recorded last year, and 119% of the average storage over the last decade, a recent Barclays report stated. As of August 27, the storage level in the reservoirs collectively stood at 131.2 billion cubic meters, or 77% of capacity.
The report, authored by Barclays Chief Economist Rahul Bajoria and analyst Shreya Sodhani, states that the total amount of rainfall recorded in the last three months — between June 1 and August 30 — is at a surplus of 9.5% versus the long-term average. India has already received more than 88% of the total rainfall it gets during a full monsoon season.
The distribution of rainfall across India has also been satisfactory, the Barclays report said. At least 13 out of a total of 36 geographical areas received excessive rainfall, while only three recorded below-normal showers.
The impressive monsoon season has also had a positive impact on crop acreage, or the total amount of sown area, which has remained robust. More than 100% of the total area normally sown was covered during this period.
“As of 21 August, the area sown was reported at c.106.3mn hectares, significantly ahead of the the c.97.9mn hectares sown last year for the same period,” the report reads. With the end of the sowing season inching closer, India may just record one of its strongest years in over two decades, based on the progress made thus far, the analysts found.
However, the report ends on a word of caution: while the satisfactory monsoon season is likely to lead to a robust harvest this year, it cannot singlehandedly spur India’s economic recovery, particularly at the heels of the debilitating Covid-19 pandemic.
“A robust harvest could at best be a mitigating, but not an offsetting factor for India’s growth profile. We recently downgraded our GDP forecasts, and now see the Indian economy contracting 6.0% y/y in FY 20-21,” the analysts wrote.
Meanwhile, with dams inundated by excess rainfall, thousands have been displaced and some have even been killed in floods across the country, this year. Most recently, at least 24 people were killed in flooding in Madhya Pradesh and Odisha. Earlier, at least 30,000 people were affected by the overflowing of the Brahmaputra river in Assam.
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