How analysts view the monsoon

Sangeeta Singh and Jacob P Koshy
MRIDUL SAGGAR, chief economist, Kotak Securities Ltd

“In our view, the base case now looks at overall rainfall deficiency of about 20-25% during the full monsoon season, as the El Nino effect may keep rainfall subdued in the weeks ahead. As a result, value added in agriculture may contract by 8% and with some spillover to other sectors, it may pare India’s real gross domestic product (GDP) growth by 1.7% from 6.5% under normal monsoon assumptions. We now expect India’s real GDP to grow by only 4.8% in FY2010.”


TUSHAR PODDAR, vice-president and chief economist, Goldman Sachs

“We estimate that the lower rainfall projections will likely lead to negative agricultural growth. We retain our FY10 GDP growth forecast of 5.8%, and think that consensus forecasts of 6.3%, and the Prime Minister’s Economic Advisory Council’s forecast of 7% looks a bit rich. We think this will have a significant negative impact on rural demand. As food prices go up, this will also impact non-food consumption.”


MANOJ VOHRA, director of research at the Economist Intelligence Unit

“Deficient monsoon is a cause of concern because it will impact rural demand adversely. However, looking at the contribution of agriculture to the GDP of the country, it will not prove to be a big drag on growth.”


MADAN SABNAVIS, chief economist, National Commodity and Derivatives Exchange of India

“The way monsoon has played truant with late arrival and low average precipitation overall kharif (summer) crop will be negatively affected. Rice, groundnut and sugarcane will be particularly affected. And since kharif contributes 60% to the total crop production, GDP is bound to be affected. However, it has also been seen whenever kharif has not performed, Rabi (winter) crop has compensated for the loss. So, I feel the impact of GDP will not be as high as is being thought of.”