The weather office’s prediction of a normal monsoon for the fourth year in a row has cheered the agricultural sector and the broader economy, not least because of the growing accuracy of its forecasts.
In its first long-range forecast for 2022, the India Meteorological Department (IMD) on Thursday said it expects rainfall to be 99% of the long-period average (LPA) during the June-September monsoon. Statistical forecasts rarely achieve a 100% strike rate, but the error rates in India’s official monsoon predictions have come down over the past two decades, IMD data shows.
The state-run agency reports two forecasts every year—in April and June—and the figure is based on the percentage distance from the average rainfall recorded annually over the past five decades. While the forecast has an error tolerance of 5% on either side, the average error between 2007 and 2019 ended up being 6.3% of LPA (1971-2020). This was an improvement over the previous 13 years (1995-2006), when the average error was 8.9% of LPA.
In 2020 and 2021, the gap between the forecast and the actual rainfall narrowed to 8.8% and 1.4% of LPA, respectively.
While the forecaster has been fairly successful in predicting normal monsoon, the real challenge lies in predicting droughts and extreme rainfall. Since 2001, the country has had five deficient-rainfall years (2002, 2004, 2009, 2014 and 2015), out of which four ended with droughts.
In the first three of these years, IMD had predicted a normal rainfall, over-projecting with an average error of nearly 18% of LPA. In 2014 and 2015, the error stood around 7%.
Out of the eight normal-monsoon years since 2001, IMD has got it right six times and under projected and over projected once each.
The prognosis of yet another year of normal rainfall bodes well for the country’s agricultural output, with 65% of the gross cropped area being rain-fed, which influences both summer and winter crops.
In the past two decades, the GVA (gross value added, or the value of goods and services) of agriculture and allied sectors has expanded healthily in nearly all years of normal or above-normal rains, at an average of 5.2%, shows a Mint analysis.
In all years of deficient rainfall, GVA in these sectors contracted, except on one occasion (2015) when it remained flat. However, in 2020, when the country saw above-normal rainfall (nearly 109% of LPA), the agriculture sector had an exceptional show even amid the pandemic: GVA in these sectors grew 3.3% while GDP contracted 6.6%.
In 2021, a normal monsoon year, the agricultural GVA grew 3.3% again, though it appears unlikely this year. As economic activity normalizes, there could be a shift in the availability of agricultural labour across different regions, affecting acreage in some states, which has been the key driver of agri output in 2020-21 and 2021-22.
“Besides, inadequate availability of fertilizers poses a concern for agriculture, chiefly on account of lower imports amid limited availability in the international market and elevated prices," said an ICRA report in March. “Thus, even with a normal monsoon and healthy reservoir levels, acreage and therefore the output may not rise meaningfully in FY23, constraining agricultural GVA growth below 3%."
At the same time, with a 16% share in India’s output, the agricultural sector has the power to impact the overall economic production. The economy will be in fine fettle in 2022 if IMD gets it right again this time.
