News of the Day Lakes dry up, groundwater depletes: Drought scare in half of India

More than half of India is reeling from drought-like conditions, the India Meteorological Department’s (IMD) latest data shows, with millions struggling for drinking water as lakes dry up and groundwater levels deplete amid a sluggish monsoon that, as per the agriculture ministry, has impacted the sowing of key summer crops over the past two weeks.

According to IMD, the monsoon was 39% deficient till June 22 despite marginal improvement over the last week. In its Sunday bulletin, the national weather forecaster said the monsoon advanced into parts of central Maharashtra, Marathwada and Vidarbha, remaining areas of Karnataka, Telangana, Odisha, Jharkhand, Gangetic West Bengal and Bihar, most parts of Chhattisgarh, and some areas of eastern Uttar Pradesh. But the weather system’s poor intensity has stoked a severe water crisis in many states, as half the country, especially states such as Maharashtra, Tamil Nadu, Karnataka, Telengana and Andhra Pradesh, battle a drought-like situation..

Most districts in east, central and peninsular India are facing “extremely dry” conditions, as per the Standard Precipitation Index (SPI) that shows the observed rainfall amount compared with the rainfall climatology at a certain place over a long-term reference period. The index is released by IMD Pune’s Climate Application and User Interface team.

“The index reflects long-term trends and water storage conditions in different parts of the country. Scanty pre-monsoon rains and delayed monsoon onset together created conditions for drought. The outlook for next week is a little better,” said PulakGuhathakurta, head of IMD Pune’s Climate Application and User Interface Group.

Nearly 51% of the country’s total geographical area has received deficient rainfall so far, according to IMD, delaying planting of crops, according to the agriculture ministry, and prompting rural households to conserve diminishing water sources for drinking instead of farming.

Water levels in 91 nationally monitored basins and reservoirs — critical for farming, power generation and drinking — is currently less than the corresponding period of last year in the country as a whole and is also less than the average storage of last 10 years during the corresponding period, showed Central Water Commission data till June 20.

Reservoirs in Telangana were 36% below normal; Andhra Pradesh at 83%; Karnataka at 23%; Tamil Nadu at 43% and Kerala at 38%. Normal storage means average storage of the past 10 years.
Chennai is one of several cities that is facing intense water shortage across the country. Tamil Nadu’s three reservoirs at Poondi, Cholavaram and Chembarambakkam, which supply water to the state’s capital, have depleted dramatically, forcing IT companies to redraw their operational plans and pushing eateries to stop serving lunch. Several water bodies, including the Chembarambakkam lake and the Puzhal reservoir, have shrunk due to water stress.

Some river basins are also extremely dry. The Tapi basin, for example, is 81% below the 10-year average storage; Sabarmati at 42%; Krishna at 55%; Cauvery basin at 45% and Ganga basin at 9.25% below the levels.

The NitiAayog said last year that India was facing the worst long-term water crisis in its history as demand was outstripping supply.

“Clearly, we are looking at what could turn into a national emergency. The Manual of Drought Management (revised, 2016) clearly lays down the responsibility of the central and the state government in drought declaration, relief and mitigation,” the All India KisanSangharsh Coordination Committee said in a statement on Sunday.

A central government official, however, said there was no cause for concern over the progress of the monsoon. “Cyclone Vayu did disrupt the normal progression of monsoon. There was delayed onset of monsoon also. But now it’s progressing normally. It has entered parts of MP and Madhya Maharashtra. A lot of moisture feedback is there which will bring rains to Delhi also in the next couple of days. There may be a brief lull in monsoon progression around June 27 but on July 1 we are expecting a low-pressure area over the Bay of Bengal, which will help monsoon progress. There is no cause for concern,” said M Rajeevan, secretary, ministry of earth sciences.

The weather department has predicted that the monsoon will progress until June 27, after which a lull could likely impact the sowing of Kharif crops.

K Sathi Devi, head of the National Weather Forecasting Centre at IMD, said: “We are expecting a lull because there is no weather system over the Bay of Bengal to take the monsoon circulation further. We will know if another low-pressure area is forming in the forecast next week.”

The monsoon is critical for agriculture, which employs nearly half of India’s population, since 60% of the country’s net sown area doesn’t have irrigation. Rural incomes are a key driver of overall demand in the economy.

Sowing of key summer crops continued to fall below normal levels in most states for the second straight week due to scanty rainfall, agriculture ministry data until June 21 showed.

Farmers have been able to sow 9.06 million hectares so far, down 12% from last year’s 10.3 million hectares sown in the corresponding period. When compared with the average area of the past five years, which is considered normal for the corresponding week ending 21 June, the sowing deficit is higher at 14%.

The area under most summer crops such as rice, pulses, millets or coarse cereals, cotton and oilseeds, which account for half of India’s annual food output, lags last year’s level.

The total area planted with these crops so far also lags the average coverage of the last five years, which points to drought-like situations in many states. Farmers are not confident of undertaking farm operations unless rains improve.

Cultivators have been able to sow rice, the summer staple, on about 0.630 million hectares compared to last year’s area of 0.924 million hectares, a shortfall of about 31%. The area under pulses, a key crop grown in states such as Maharashtra, Andhra Pradesh and Karnataka, among other states, stands at 0.170 million hectares, which is 49% less than last year’s levels.

The sugarcane acreage, grown mostly in Maharashtra, Uttar Pradesh and Karnataka, is down 2%. Acreage under oilseeds so far, which is a major contributor to farm incomes, has been 53% less than last year’s area. Cotton sowing trails by 12%, the data showed.

“If the rains improve, sowing will pick up rapidly. There is time for catch up. However, if the monsoon deficiency continues into July, then agricultural output will take a hit,” said R Mani, an agricultural economist with the Tamil Nadu Agricultural University.

 

NirmalaSitharaman’s budget may aim for structural policy changes

Finance minister NirmalaSitharaman’s maiden budget will set the stage for reforms over the next five years that could see structural policy changes in areas such as land, labour, capital and entrepreneurship to attract investment, offer incentives to boost consumption, and spend public money on social infrastructure for equitable growth, officials aware of the matter said.

As the interim budget presented on February 1 announced several popular decisions, this is being seen as a time for consolidation and to present a five-year policy road map that would boost sagging economic growth and address unemployment, two main concerns for the government, said the officials cited above who asked not to be named.

While the coming budget may incentivise job-oriented private investment and focus on skill-development initiatives, the government is likely to persuade banks, particularly public sector ones, to slash interest rates in order to boost consumption, the officials said.

It is likely that the Reserve Bank of India could further lower lending rates to provide more room to commercial banks for cheaper loans, they said. The central bank cut the repo rate to 5.75% on June 6, its third cut this calendar year.

“An indirect boost to consumption will also come through interest rate reduction. The policy rate has already been reduced by 75 basis points this calendar year. About 40% of this has been passed on to the lending rates and the RBI may endeavour to increase monetary transmission further. One more reduction of 25 basis points in the repo rate may be considered later during the year,” Dr DK Srivastava, chief policy adviser, EY India, said.

“Private sector investment demand may also be stimulated through an interest rate reduction. To ensure that interest rates remain at a lower level, the government may adhere to the interim budget fiscal deficit target of 3.4% of GDP so that some investible resources remain available for the private sector at reasonable costs.”

The officials quoted above said the government will continue its policy focus on rural India and the same is expected to be reflected in the budget as rural development has immense potential to create both demands and jobs.

Srivastava said the government will be focused on the rural economy for boosting consumption.

“The main vehicle for this in the short run would be the income transfers under PM-KISAN, which would add to farmers’ disposable income, and in the medium term, the government’s productivity enhancing efforts to double farmers’ income by 2022,” he said.

According to recently released official data, India’s GDP fell to almost a 20-quarter low of 5.8% in the last quarter of 2018-19, which brought down the full-year growth estimate to 6.8%, lower than the initial estimate of 7%.

The GDP that grew at 8% in the first quarter gradually dropped below 6% in the fourth quarter mainly due to a slump in agricultural and industrial growth.

The government is also concerned about growing unemployment, which was also reflected in an official report released on Friday. According to the Periodic Labour Force Survey (PLFS) report for July 2017 to June 2018, the unemployment rate soared to 6.1%. While the PLFS figures are not strictly comparable with earlier Employment Unemployment Surveys of the National Sample Survey Office, the numbers paint a grim picture on the employment front. What is particularly worrying in the PLFS numbers is the big increase in the unemployment rate among educated workers.

The government’s recent pension offer to the unorganised sector is also expected to boost consumption, officials said. “Supplementary support to disposable income would also come through a number of pension schemes covering small traders and retailers as well as farmers above 60 years of age,” Srivastava said.

The first budget of the Narendra Modi government’s second tenure is expected to be a precursor of major economic reform with an objective to make India a $5 trillion economy by 2024, about double its current size. The government’s ambition was reflected in its recent interactions with experts, officials said.

According to experts, the government could undertake a major infrastructure expansion programme that could be partially funded through budgetary resources and partially though extra-budgetary resources.

Prashant Deshpande, partner, Deloitte India, said the budget could bring in reforms aimed at creating a tax- and business-friendly environment.

He said that the government could give several tax concessions to exporters, particularly to boost domestic manufacturing.

Officials said the budget might take some key decisions to boost the real estate sector which could have a multiplier effect on the economy as it would spur demand for steel, cement and labour, particularly in the unorganised sector.

According to SurendraHiranandani, founder and director, House of Hiranandani, the government’s “housing for all” mission was expected to accelerate the economy, provided the government incentivised the key stakeholders through direct and indirect tax measures.

“There is a significant expectation to cut GST rates to a single, standard rate, and not have multiple rates or taxes. The abolition of stamp duty or its incorporation under GST will be an added advantage. Relaxation in income tax slabs will also be welcomed as it will allow the salaried class to make further investments in real estate. The government must look at increasing the deduction limit under section 80C from the current ~1.5 lakh,” he said.

(Source – Hindustan Times)