Finance Minister Arun Jaitley on Thursday sought to allay fears over predictions of deficient monsoon saying conclusions on that basis either on inflation or some kind of distress situation are “far-fetched”.
He also said in the last 48 hours, ever since the IMD predicted deficient monsoon this year, the conclusions were being drawn up in an exaggerated manner and it was necessary to place the finance ministry’s view on the subject.
Dismissing the slide in the stock markets in last three days as not a trend, the Minister said revenue, especially indirect tax collections – a key indicator, has shown an impressive jump.
Jaitley expressed confidence that food grain production will not be impacted significantly by the prediction of below- normal rainfall in north-western region as the area is well-irrigated while monsoon will be normal in all other parts of the country.
Also, the country had enough food grain stocks to meet any contingency, he said.
“The kind of speculation that we have been seeing and speculative analysis that we have been reading about appears to be somewhat misplaced. What is extremely relevant is obviously has significant impact on Indian economy,” he told reporters here.
Jaitley said what was relevant was the geographical distribution of monsoon and the timing of rainfall. “These are almost as significant if not more than the extant of rainfall. And this area by which the impact is more significant than the sheer volume itself”.
The IMD on Tuesday predicted that rainfall was likely to be only 88 per cent of the long-term average and the Reserve Bank of India suggested the government to draw contingency plans to deal with the impact of poor monsoon on prices.
The BSE Sensex has fallen by 1,035.57 points in last three trading sessions on fears of drought.
In the wake of predictions about the monsoon by the IMD, Jaitley called a meeting of senior meteorological scientists yesterday and had a detailed analysis of the prediction and estimates with them.