The temporal variation is even more stark. Only two in 14 weeks have shown normal rains. Chart 2 juxtaposes weekly variations with cumulative progress in seasonal rainfall. August rains helped turn the balance towards excess, after the long dry spell in July.
has improved due to a largely good monsoon (chart 3), though temporal variations are detrimental to productivity, and extreme events have caused physical damage to crops in key states.
The prospects for farm production —the estimates would be out at the end of the month — are certainly good, and the rural economy can pin its hope on two indicators: Tractor sales and rising rural wages.
Tractors are the only automobiles that have shown growth in sales (chart 4) during the pandemic, indicating improved farm sector
activity. However, retail sales of two-wheelers — a key indicator of rural demand — are weak due to the pandemic shock, indicating that the pent-up demand would rise after the harvest in October and November.
At the same time, the central government has increased the daily wage rate under the Mahatma Gandhi National Rural Employment Guarantee Scheme. Monthly wage data shows that at the national level, MGNREGS wages have increased in the 8-13 per cent range during April-September 2020 compared to the previous year (chart 5). These wages act as a floor for wages in the rural economy as a whole, including in farm and construction sectors.
India Meteorological Department has predicted near-normal rain for September and has also indicated a late withdrawal of monsoon this year. In all, a good monsoon has helped counter the disappointment experienced in other areas of the economy, to some extent.