So far so good

The weather office's forecast of a normal monsoon this year is prima facie good news for the economy, since it answers broadly one of the key questions that determine economic performance.

It is interesting though that the stock market has taken the news in its stride, without going into celebration mode. This subdued response of the market has been attributed to the fact that it is too early to factor in the impact of the monsoon on the economy.

But even for the crucial monsoon-dependent sectors, notably agriculture, the early prediction provides only partial re-assurance. For, what farm planners need to know, besides the overall performance of the monsoon, is the likely time of its onset and the distribution of rainfall over time and space.

The quantitative prediction of the monsoon rainfall that the India Meteorological Department (IMD) makes is of limited use for farm planning, though it does provide some other useful indications, such as the prospects for reservoir recharge and the consequential implications for irrigation, power generation, navigation and overall water availability for industrial and other purposes.

The only clue the IMD has given to the regional distribution of monsoon rainfall is that a large southern tract, comprising Kerala, Karnataka and their adjoining areas, which has been reeling under virtual drought for past two years, is likely to get normal rainfall this season.

This projection is not based on any prediction model but on the historical evidence that there has seldom been a dry spell of more than two years in a row in this region in the past 100 years. Whatever the basis of this prediction, this is sure to cheer the affected states though relief will come only after further accentuation of distress as the summer advances.

There are a few other reasons as well for reacting coolly to the indication of a good monsoon. For one thing, growth in farm production this time is unlikely to be spectacular in the wake of the last monsoon.

This is simply because growth will not be measured against the drought-ravaged output of an earlier season, it will be against the current year's high production base.

Besides, past years' data regarding crop production and monsoon rainfall in the country as a whole does not show strong direct correlation. There has been good agricultural performance during below-normal rainfall years, and vice versa.

This aside, the reliability of the new prediction models used by the IMD is yet to be fully ascertained. The earlier 16-parameter power regression model used for monsoon prediction since 1988 had given accurate forecasts till 1993 before starting to show erratic results. Its prediction went totally topsy-turvy in 2002, forcing the IMD to seek new models.

The present models, one based on eight parameters and the other on 10 parameters, have been tried out only last year. They have proved accurate but no judgement can be passed on the basis of a one-year performance. Thus, the IMD prophecy is welcome for what it says, but it can at best generate cautious optimism.