An analysis of how the promise of a good Monsoon offers the much-needed turning point for the Indian economy. Indian finance minister Arun Jaitley, his team at North Block, farmers, analysts and investors will have one eye peeled firmly on the skies. Will rain gods be bountiful this year After two successive years of drought, which have hampered the government's concerted efforts to revive the economy, there is hope for a normal Monsoon - and a sharp economic recovery - this year.

The operative word here is hope, not certainty. India's official weather forecaster, the Indian Meteorological Department (IMD) has predicted an above normal Monsoon. But the Monsoon rains, which reached India eight days late - on June 8 instead of June 1 as earlier forecast - was 12 per cent deficient at the end of June. This has affected the sowing of crops in the ongoing kharif season. According to government data, total area under cultivation till July 1 was down about 23 per cent to 21.59 million hectares compared to 27.93 million hectares on July 1 last year. The good news is that sowing operations, which got off to a slow start this year because of the delayed arrival of the Monsoon, is picking up pace fast as the monsoon rapidly makes up for lost time by covering more parts of India. An IMD spokesperson said: “A 12 per cent deficit in June is par for the course considering that the monsoon hit the mainland only on June 8. The deficit has reduced progressively from 25 per cent on June 16 to half that amount by the end of the month. Our modelling shows a considerable pick-up in rains this month. We expect very heavy rainfall across India in July, which will wipe out the deficit completely.” True to the forecast, torrential rains across the country in the first three days of July has brought the deficit down to just 6 per cent. The distribution of rains across the country is also very good. IMD says it expects rains in July to be 107 per cent of the long term average. This will ensure that the monsoon is back completely on track by the end of this month, Traditionally, July, which receives the maximum rains during any monsoon season, is the most important month as most of the kharif sowing is done in this month. Experts expect the area under cultivation to at least touch, if not exceed, last year's figure. A normal Monsoon is critical for India's economic well-being as 60 per cent of farmlands across the country do not have irrigation facilities and so, are dependent on the weather gods for timely and adequate supply of water for the sowing and survival of crops. Rural India accounts for almost 50 per cent of all motorcycle and television sales, 25-30 per cent of car sales and 100 per cent of tractor sales in India. It also accounts for a large proportion of sales of textiles, readymade apparels, footwear and a wide range of other fast moving and durable consumer goods. It must be borne in mind that the rural economy is much more than agriculture. Apart from farm-related trade and industry, there is a huge eco-system of rural artisans, service providers, industries and professionals completely unconnected to the farm value chain that accounts for two-thirds of India's rural economy. But since the farm sector still supports about 57 per cent of India's population, its fortunes critically impact consumption and demand in the economy and, hence, the country's overall GDP growth. Then, good harvests typically lead to a spurt in rural house and other construction activity, providing a fillip to the cement and construction materials sectors. This will have a multiplier effect as demand for industrial products and materials from rural India will boosts jobs and prosperity in urban clusters, leading to a virtuous cycle of consumption demand, investments, jobs and prosperity. A caveat will be in order here. A good Monsoon will undoubtedly lift the fortunes of India's economy and will almost certainly lift the GDP growth rate to 8 per cent and more, but many analysts feel it will take at least two years of normal Monsoons to overcome the stress created by two successive droughts. For example, there are high levels of delinquency in loans taken for the purchase of tractors and two-wheelers in rural India. A good harvest and higher rural incomes will enable large sections of the rural population to pay off or at least substantially reduce their liabilities, thus, setting the stage for all round rural prosperity next year if the Monsoon is normal once again. But a bumper harvest will feed the green shoots of recovery that have started sprouting in various key sectors such as cement, commercial vehicles, power generation and diesel demand. And this will mitigate a lot of stress in the rural and urban economies. Then, many of the government's flagship schemes such as Make in India, Mudra, etc could not reach their full potential as the rural economy, which accounts for as much as 46 per cent of Indian GDP, was running on empty. A good monsoon will allow the economy to benefit from them as well. The building blocks of a broad-based recovery are, thus, in place. It needs a spark to set it off. And that spark could come in the form of the rain gods showering their bounty on the parched Indian mainland.