Shikhandi, Dhritarashtra, Ravana - in public discourse recently, people have dispensed names from history/mythology too freely. The ex-finance minister and Congress presidential candidate's budget speeches have also had references to Indra being kind.
Let's note, sacred texts have a rule. If a king rules badly and governance is unsatisfactory, rains will suffer and the country will be visited by famines/drought. (There are also exhortations to throw out such bad kings.)
Coming back to the mundane question of rains and the economy, the south-west (summer) monsoon is more important for India than the north-east (winter) one, and kharif more significant than rabi.
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The Indian Meteorological Department (IMD) long-range forecasts for 2012 south-west monsoon are under scrutiny. True, all such forecasting models are stochastic. But one can raise legitimate questions about accuracy.
THE AGRICULTURE ANGLE
How could IMD have been so dramatically wrong in 2002, 2004 and 2009 and how can other forecasters do much
better? Notwithstanding La Nina, El Nino and volatility in global climate, can we trust IMD? This year, till end June we were 29% below IMD's forecast. Of the 36 meteorological subdivisions, rainfall has been deficient in 11 and scanty in 16.
Assuming a less-than-optimistic end game, what's the risk to the economy? Agriculture's direct share in GDP is down to 15%, though there are indirect effects through rural demand. And it's misleading to say, as many do, that 50% of the workforce is employed in agriculture.
In rural India, even if agriculture is a primary employer in agricultural season, outside the season, secondary employment is in assorted services and construction.
There are several transitions that happen with development - foodgrain to other crops, on-farm employment to off-farm, primary employment to secondary and tertiary, rural to urban and so on. Policy-induced distortions slow down these transitions. However, this doesn't mean transitions aren't happening. National Sample Survey (NSS) shows this.
Why is only 55% (some earlier figures are lower) of agricultural area irrigated? Why do we have a problem with dry-land agriculture? There are also issues with the nature of irrigation and over-exploitation of groundwater. Given India's precipitation, there should have been no problems of irrigation and water scarcity.
INDRA AND BAD POLICY
The agricultural problem is a self-made one, reflective of bad policy. Had that not been the case, six decades down the line, we wouldn't have needed MGNREGS. Down the years, Indra became a relatively minor god. For agriculture, policy ensured Indra remained a major one.
Aggregate levels of rainfall are misleading. What matters more is its temporal and spatial spread, sequence of rains. For 2012, we have no handle on that yet. While on sequence of rains, one shouldn't blow up importance of kharif too much either. While inadequate rains affect kharif sowing, rabi often compensates.
Deficient rainfall is a risk factor. Confronted with uncertainty, one requires risk-mitigation instruments like insurance. But we don't have a satisfactory system of crop insurance yet. Nor do we allow other forms of risk-mitigation.
Consider initiatives like the following. Develop land and redistribute it. Build water reservoirs, wells, tanks. Plant trees for soil and water conservation, involving participation of people. Offer tax initiatives to develop uncultivated land. These aren't ideas from Approach Paper to 12th Plan. They are from Kautilya's Arthashastra. That they continue to be relevant demonstrate how much of a mess policy has made. Much of rural India isn't in the 21st century.
LOOKING FOR A SCAPEGOAT
On the question of output, there are crop-wise variations. But in terms of value of agricultural output, which states contribute the most? One would probably list Punjab, Haryana, UP, MP, Haryana, Bihar, AP, Maharashtra, West Bengal and Gujarat.
The point is a simple one. Given variations in irrigation across states, deficient monsoon doesn't hurt all states equally. There are human costs of deficient rains in Rajasthan, Jharkhand or Chhattisgarh. However, that doesn't necessarily hurt overall agricultural GDP that much, at least the marketed part. States also often overstate the case for drought, since that ensures Central assistance.
With a reduced share in GDP, alternative sources of employment in rural India, low importance of dryland areas in value of agricultural GDP and even MGNREGS, I think the case for deficient monsoons is overstated. Therefore, even if the south-west monsoon is really bad, and there's no evidence of that yet, I don't see how it can shave off GDP growth by more than 0.25%.
But a bad monsoon becomes a convenient scapegoat, like Greece's debt crisis. Indra has many stories, not just about his being the god who showers down rain. He also kills Vritra, who had dammed up the waters and releases them. Here is an irrigation story there - if the government cares to know.
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