Structural issues in water usage can dampen India's Monsoon cheer: CRISIL
Commodity Online | June 08 2016
UPDATED 14:15:32 IST

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India is upbeat about robust monsoon reports but the country should tackle the structural issues in water usage, warns rating agency CRISIL. “In the medium term, a high resilience on monsoons exposes the vulnerability of water usage in agriculture and warrants reform in the system,” says CRISIL.

Last week, the Indian Meteorological Department (IMD) reiterated its April forecast of a copious south-west monsoon -- at 106% of the long period average (LPA). IMD’s second take offers a 73% probability of normal or above-normal monsoon (33% normal, 40% above normal), compared with 74% predicted in April.

What’s more, the weatherman said, there is a 50% probability of La Nina conditions developing during the season. That said, the spatial and temporal distribution of rains will be just as critical as the quantum.

A large part of the country is witnessing drought, declining ground-water levels, and shortage in reservoirs, following two consecutive sub-normal monsoons An above-normal monsoon this year will augment groundwater and reservoir levels and in turn increase crop production. A normal monsoon this year will help put a tap on food inflation and in turn offset rising pressures from crude oil prices and sticky services inflation.

However, the sensitivity of crops to rainfall signals the need for improvement in irrigation facilities, change in cropping patterns, harnessing of rainwater, adoption of water conservation techniques and availability of stable electricity. Also, efficiency of water usage needs to improve.

India currently uses 2,800 cubic metre of water to produce 1 tonne of rice, compared with half that – or 1,321 cubic metre – in China. This underlines the need to address structural issues, the rating agency said.
Commodity Arrivals Rate
Mustard Oil 1.3 2600.00
Arecanut 1.08 19500.00
Sugar 368 3402.00
Gur 60 4650.00