Near term outlook for rural economy looks grim: Report
The agrarian distress seems here to stay, owing to prevalent drought like situations in several states, near stagnant wage growth levels and signs of sluggish progress of monsoon, a recent report has said.
According to the Indian Metrological Department, delayed rainfall for over two weeks brought all India rainfall level to lower than that of normal estimates.
The Centrum report said that the sluggish pace has been prompted by the delayed onset in south-west monsoon over the Kerala coast.
"The monsoon hit the coast on June 8 compared to the typical start date of June 1. Cyclone Vayu acted as a major impediment to the slow momentum and restricted monsoon advancement," the report said.
With deviation of cyclone off the coast of Gujarat, the report noted, the IMD expects rainfall to pick up only after the cyclonic disturbance has faded, until then heatwave is expected to continue in North and Central India.
According to the private weather forecaster, Skymet, the monsoon usually covers two-third of the country by mid-June. This year however, it has covered only about 10 per cent.
The report also highlighted that the conditions may improve after June 20.
Besides, the report concludes that the persistent weakness in growth of tractor's domestic sales, another sign of rural distress.
"Domestic tractor sales growth, often regarded as the major gauge to track rural economy, has been contracting for the past four months, as compared to high double digit growth seen in late 2018. However, the contraction has widened to 16 per cent YoY in May as compared to 13.2 per cent YoY in the previous month," it added.
The report saw the near term outlook fragile as the IMD predicted below normal monsoon rains in the months of June and July.
Looking ahead, the rural economy might witness some respite and the recovery is most likely to be driven by the fiscal support and improving liquidity conditions in the economy, the report added. IANS