Dampening down inflationON A brutally hot day in May, Gani Patel is sitting in Vipin Seeds, a farm-supplies store in Jalna, a small town in a drought-prone region of India. The talk in the shop is of prospects for the monsoon, the three-month rainy season beginning in June. Business is slow. Last year’s rains were below normal, so farmers are short of cash. Mr Patel grows cotton and maize on his 12-acre farm in Bhakarwadi, around 45km from Jalna. In case the rains disappoint again, he plans to install a drip-irrigation rig to make the best use of the water he draws from his two wells.
Much in India’s economy depends on the monsoon. Farming is India’s largest employer. Three-fifths of the land under cultivation is watered only by rainfall. Food accounts for almost half of the consumer-price index, so prices ebb and flow with the rains. A forecast at the start of June by the India Meteorological Department that the rainy season would again fall short was worrying. Then the heavens opened. Rainfall across India in the first three weeks of June was 21% above its 50-year average. Mumbai had its wettest 24 hours in ten years on...Continue reading
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