India Meteorological Department's (IMD) prediction of a "normal" monsoon this year will boost agriculture growth and will soothe the nerves of investors and markets.
"The country will receive 96 per cent of Long Period Average", he said.
KJ Ramesh, the chief of the MeT department, said that the combination of a weak El Nino and positive Indian Ocean Dipole is expected to give a positive monsoon for India this year. "We believe that the agricultural GDP is most likely to be in range of 3-4 per cent, a tad low compared to the fiscal year 2017 expectation, if rainfall remains normal", said a statement from the Ecoflash, a research agency of the SBI.
The IMD had previous year predicted the rains to be above normalmore than 106 per cent of the LPAwith a model error of plus minus five per cent in its first forecast, but the monsoon turned out to around 97 per cent of the PLA as La Nina remained at neutral state.
According to the IMD, 96 per cent is however averaged over the country as a whole, while the regional forecast will be done in June and the date of the monsoon's onset into Kerala will be announced in late May. "However, the northeast, Rayalseema region of Andhra Pradesh, and Tamil Nadu may receive less rainfall", said a senior IMD official. 2014 and 2015 had witnessed deficient rainfall. Officials said the June update will fine-tune the forecast as more information will be available on the evolution of El Nino conditions in the Pacific, which is known to adversely impact monsoon rains in India.
The IMD has over the past decade relied on a statistical model that measures the values of five key weather-related parameters worldwide, including sea surface temperatures in the eastern and central Pacific Ocean, to issue long-range monsoon forecasts.
Forecasters globally are predicting a return to El Nino, with Australia's Bureau of Meteorology putting a 50 percent probability on it developing this year. However, there are signs of a positive IOD.
The apex bank pointed out that the main upside risk around the inflation was "the uncertainty surrounding the outcome of the south west monsoon in view of the rising probability of an El Niño event around July-August, and its implications for food inflation". "They offset (effects of) each other", Ramesh said.
However, a similar phenomenon in the Indian Ocean, called the Indian Ocean Dipole, is now in a favourable condition.