NEW DELHI: Global climatic conditions have turbocharged the monsoon and given it the momentum to take it up to Kashmir in three to four days, a week ahead of schedule, and accelerate agricultural activity in the grain-bowl states of Punjab and Haryana on the say. 

Rainfall in June is almost certain to be significantly more than normal, going by predictions of weather scientists from Australia to the US, giving a flying start to the four-month season that brings 75 per cent of the rainfall the country receives and fills up water reservoirs for irrigation and hydropower generation for a year.

The monsoon has already delivered 16 per cent excess rainfall since the start of the season on June 1, and is expected to remain strong at least until the end of the month. This should cheer the markets and calm fears of inflation, which had emerged as the monsoon made a sloppy start. 

The floundering monsoon has been catalysed by an equatorial system of clouds and disturbances that traverses the globe. The system, called Madden Julian Oscillation (MJO), has strengthened rain-bearing clouds along its path and given the country 33 per cent surplus rain on Saturday and a drenching 88 per cent surplus on Sunday. "MJO is definitely influencing the southwest monsoon," said Laxman Singh Rathore, director-general of meteorology, India Meteorological Department. 

David Fuller's view

This is very good news for India and its economy.  The first two weeks of the monsoon season were disappointing but the rains certainly arrived over the weekend.  They are now forecasting higher than normal rainfall.  Provided this is not so heavy that it is damaging for crops, the probability of a satisfactory monsoon for India will help the large agricultural sector, lower inflation and boost GDP growth.

This is very good news for subscribers who also have significant personal investments in India, as I do.  This has been a year of consolidation, so far, but a good monsoon will bring more international investors back to India, given its overall long-term growth potential under Narendra Modi’s leadership. 

India’s Sensex Index (weekly & daily) has risen for the last eight days, correcting a previous oversold condition.  The first test of resistance occurs near 28000.  If it can hold most of the recent gains near that level, and then break clearly above the May high, we will have further confirmation that we have seen the low point for what I have been describing as a lengthy medium-term consolidation.  I would not be surprised to see the Sensex Index exceed its March high just above 30000 before yearend.     

(See also: India to race past US in 25 years; I am saying it with money, not words: Masayoshi Son, in this interview with The Economic Times.)  

Whatever we think of the forecast, I like the confidence of this billionaire founder of Japan’s Softbank, who is investing in India.  He should be a lot wiser than he was at Softbank’s peak in 2000.