Critisising the prediction of Indian Meteorological Department (IMD) on deficient Monsoon this year, Finance Minister Arun Jaitley on Thursday said the conclusions were being drawn up in an exaggerated manner and the IMD should take the Finance Ministry’s view on the subject.
The IMD on Tuesday predicted that rainfall was likely to be only 88 per cent of the long-term average and the Reserve Bank of India suggested the Government to draw contingency plans to deal with the impact of poor Monsoon on prices.
Finance Minister Arun Jaitley also sought to allay fears over predictions of deficient Monsoon saying conclusions on that basis either on inflation or some kind of distress situations are ‘far-fetched’. “In the last 48 hours, ever since the IMD predicted deficient monsoon this year, the conclusions were being drawn up in an exaggerated manner and it was necessary to place the Finance Ministry’s view on the subject,” Jaitley told the reporters here.
The Finance Ministry expressed confidence that foodgrain production will not be impacted significantly by the prediction of below-normal rainfall in north-western region as the area is well-irrigated while Monsoon will be normal in all other parts of the country. “Also, the country had enough foodgrain stocks to meet any contingency,” he said, adding that the kind of speculation that we have been seeing and speculative analysis that we have been reading about appears to be somewhat misplaced.
Jaitley further said, “What is relevant is that the geographical distribution of Monsoon and the timing of rainfall in the country. These are almost as significant, if not more as the extant of rainfall. And this an area by which the impact is more significant than the sheer volume itself.
In the wake of predictions about the Monsoon by the IMD, Jaitley called a meeting of senior meteorological scientists on Wednesday and had a detailed analysis of the prediction and estimates with them. “Their advance predictions appear to be suggesting that we will be somewhat closer to the normal in South, Central and North East zones.
The slight inadequacy, if at all, is in the North-West and a large part of North-West has substantial irrigation facility also. “Assuming that the advance predictions are correct, on account of geographical distribution the impact on foodgrain production may not be very significant,” Jaitley said.
The Finance Minister recalled that there was a similar Monsoon pattern last year. The advance predictions this year are somewhat better than last year’s. “In any case there is abundance of food grain available and therefore, the kind of food management that we saw last year prevented any form of inflationary trend in the food management itself,”
Jaitley said, adding that for anybody to draw conclusion on that basis of either inflation or some kind of distress situation is far-fetched.
As far as the revenue is concerned, Jaitley, however, said, “Revenue, particularly indirect tax revenue, which is one of the key indicators, is showing an impressive jump. In the last few months and I have been getting data also bank wise, many stalled projects have started, some still need to be pushed up.”
“There is a downward movement in bank’s bad loans or NPAs and therefore, coupled with these trends I foresee the recovery trend in the economy continuing,” he added.
On food management, the Minister further said that it was the responsibility of the Government and the buffer stocks would be used to calm down prices. “Food management is responsibility of the Government and last year’s rainfall was much lower than this year’s prediction and rainfall happened with lag. But we did not allow prices to go up because we have huge buffer of food grains. And therefore, the Government has this tool available,” Jaitley said.
The Minister further said that the situation in the current year was likely to be better than what it was in the previous fiscal. “As far as inflationary trends are concerned by and large on account of food management and the extent of food stocks we have, we have kept it under control,” he said, adding there could be some impact on prices of certain commodities because of seasonal factors.
last year the Government managed to contain the prices of onions and tomatoes, he said, adding currently the steps were being taken to deal with shortage of pulses. “At the moment there has been some impact (of seasonal factors) as far as pulses are concerned. This could happen on account of various factors. Department of Food in the last few weeks has been holding measures to increase the supply as far market is concerned so that sudden spurt in prices of pulses could be contained,” he said.
Inflation in pulses stood at 15.38 per cent in April, up from 13.22 per cent in March. The rate of price rise in Pulses has been in double digit for four consecutive months. The BSE Sensex has also fallen by 1,035.57 points in last three trading sessions on fears of forthcoming drought.