Opinion Chased by the monsoon

We don’t need to worry about the monsoon. The all-India picture isn’t bad. Live storage has increased in 81 reservoirs monitored by the Central Water Commission (CWC). The monsoon has shifted and picked up in eastern parts of India. Therefore,we need not worry about the impact of the monsoon on either growth or inflation. Several government spokespersons have told us inflation is on its way down. That’s a vague and imprecise statement. Inflation measured by what index? And is one talking about point-to-point inflation,a function of base last year? Somewhat more precisely,a distinction has been drawn between core and non-core inflation. Non-core inflation is for food and energy and core inflation is the rest. The precise argument is that core inflation,especially food price inflation,will decline,because 2010 will have a good monsoon. In July 2010,the PM’s Economic Advisory Council submitted a report and stated: “The Council expects that 2010 will show a strong recovery in kharif crop output,as well as expansion in the output of sugarcane and cotton. This coupled with improved water availability for the rabi season and the ongoing expansion in horticulture and animal husbandry should generate farm sector GDP growth of around 4.5 per cent.”

Several propositions are bunged into that assertion. But the simple bullet point is — we had a low base last year. Therefore,a good monsoon in 2010 should lead to agriculture (and allied activities) growing by 4.5 per cent. Let’s turn to a different question. Alexander Frater is a travel-writer and journalist and three of his books have done very well. One is irrelevant for present purposes and is titled Beyond the Blue Horizon. The two others are Tales for the Torrid Zone and Chasing the Monsoon. Which of these is about India,the torrid one or the monsoon one? India is not in the torrid zone and Chasing the Monsoon is a travelogue about India. Judged by precipitation,India is fortunately situated and is ninth in the world. We have no shortage of water. It is just that water is not used efficiently,including water we get from rains. Why are Indian economic growth,agricultural growth and prices still directly dependent on the monsoon after thousands of years? The answer is inefficient usage of water,of which,a large chunk is irrigation (more correctly,its lack).

Only 40 per cent of land area is irrigated. Economic Survey 2008-09 gives us figures for 2006-07 and these tell us 35 per cent of cotton,28.6 per cent of oilseeds and 46.4 per cent of foodgrains are grown on irrigated land. (Understandably,the number for sugarcane is much higher.) Meghalaya is different. But let’s consider other states that may suffer because of deficient and late monsoon,though rabi crops sometimes compensate for bad kharif sowing — UP,Bihar,MP,Jharkhand,West Bengal and Assam. Of these,only UP has decent levels of irrigation. Bihar and West Bengal are middling. MP is bad and Jharkhand and Assam are the worst. (There are also questions about the form that irrigation takes,say groundwater versus the rest.)

We have talked about irrigation since the 1st Five Year Plan. Why has this not happened,or not happened fast enough? Gujarat is an example of what irrigation (spliced with power and road transport) can do to agriculture. The EAC has an intriguing statement. “Moreover the large number of water harvesting structures built in villages across the country through the MGNREGA should help trap rain water and increase water supply to farm fields enabling the provision of life-saving irrigation.” In principle,MGNREGA has always included water conservation,water harvesting,drought proofing,irrigation canals and renovation of traditional water bodies in permissible works. But if these have been taken up,why has the rural development ministry sought to inte-grate MGNREGA with irrigation initiatives from 2009-10? If this integration occurred from 2009-10,and not earlier,how do we have spectacular improvements within a year,as PM’s EAC suggests? In any event,if these wonderful things are happening,why doesn’t it show up in figures on irrigation and why are we still so paranoid about the monsoon,including in eastern India?

To return to the IMD and its forecasts,the ministry of earth sciences now wants a National Mission on Monsoon. The nomenclature shouldn’t give us the wrong impression. It isn’t a mission to control the monsoon. It is a mission to come up with better monsoon forecasts so that the IMD’s acts of omission and commission can be remedied. The monsoon has become much more unpredictable and erratic,whether we blame El Niño or climate change for that. We weren’t able to predict flash floods in Pakistan and Leh or the sequence of rains in eastern India. Greater uncertainty means one should have better information about the degree of uncertainty,which is where the NMM comes in. Greater uncertainty also means the need for instruments that can hedge against risk. In the agricultural context,other than commercialisation,diversification,off-farm employment,risk mitigation instruments to cushion price volatility,irrigation itself cushions the risk from erratic rains.

“In the interest of the prosperity of the country,a king shall be diligent in foreseeing the possibility of calamities,try to avert them before they arise,overcome those which happen,remove all obstructions to economic activity and prevent loss of revenue to the state.” This is Kautilya,quoted by Pranab Mukherjee in his 2009-10 budget speech.

The writer is a Delhi-based economist

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