News from India - from Lalcap India Report
posted by Deepak Lalwani on May 5, 2017 - 12:35pm
India’s monsoon rains (June–September) deliver about 70% of the country’s annual rainfall. This is crucial for farmers as only about 45% of farmland has irrigation. The balance 55% has to rely on the kindness of the Rain Gods for their livelihood. The monsoon rains are thus very critical in a country where nearly 65% of India’s 1.3 billion people depend on agriculture for a living.
India’s weather office defines average, or normal, rainfall as between 96% and 104% of a 50-year average of 89 cms for the entire four-month season beginning in June. India received average rains in 2016. This was a relief after two successive years of drought that occurred for only the fourth time in over a century. The drought had catastrophic effect for some farmers – driving them deeper into debt and into a downward vortex of poverty. And even worse for some others who committed suicide because of an overwhelming sense of helplessness because of overbearing financial pressure. Despite 2016’s average rains, farmers in the southern states of Tamil Nadu and Karnataka and some parts of the western state of Maharashtra are still struggling with the effects of patchy rains.
According to India’s state-run weather office, Indian Meteorological Department (IMD) the monsoon rains in 2017 are expected to be of an average amount. This is good news for agricultural and economic growth in the world’s leading producer of many agricultural crops. Monsoon rains this year “are expected to be 96% of the long-term average and India will have a good distribution of rainfall this year” said K.J. Ramesh, director general of the IMD. Good rains can spur farm income and with the multiplier effect can also boost consumer spending on durable and non-durable goods. And also gold. All this should translate positively for the country into higher economic growth.
Energy consumption in India, the world’s third-largest oil consumer, is expected to grow as it aims to raise its economic growth to 8%+ this year. Economic growth in the last fiscal year to 31 March 2017 is expected to be around 7% - data on this is expected in May. India imports about 80% of its oil needs. Also, to cut the country’s carbon footprint the government wants to increase the use of natural gas in its energy mix from the current 6% to about 15% in just four years. In order to achieve this ambitious target India is planning to cut its oil products imports to zero and fill this by alternative fuels, eg, methanol in the transport sector. India is also planning to start 15 factories to produce second generation ethanol from biomass, bamboo and cotton straw as it tries to reach its target to blend ethanol into 5% of its gasoline. Transport Minister Nitin Gadkari said at an investor meeting in Singapore that “Bamboo is available from tribal areas” and that India’s energy vision is to be “cost effective, import substitute and pollution free”.
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