Finance Minister Arun Jaitley allaying fears over predictions of deficient monsoon after IMD downgraded its forecast of average monsoon rainfall to 88% from 93%, triggering a sharp selloff in stocks amid growth concerns, has said that conclusions on that basis either on inflation or some kind of distress situation are “far-fetched”. He said the timing and spread of the June-September rainy season suggested the effect won't be as dire as the plummeting stock markets seemed to indicate. In the wake of predictions about the monsoon by the IMD, Jaitley called a meeting of senior meteorological scientists and had a detailed analysis of the prediction and estimates with them.
Jaitley expressing confidence that foodgrain 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, adding that advance predictions are somewhat better than last year. The region is home to the country's key farm production areas. In 2014, the country received 88% of the average, the same as what's now forecast for the current year. In the northwest, including the key states of Haryana and Punjab, rainfall last year was 79% of the long-term average.
The Finance Minister further said that there is abundance of foodgrain available and therefore the kind of food management that we saw last year prevented any form of inflationary trends in the food management,' indicating the government was ready to act by stepping up releases in the market. At the beginning of May, Food Corporation of India had more than 51 million tonnes of rice and wheat in the central pool.
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