Rating agency Crisil Research in its latest report has said that a normal monsoon this year will help put a tap on food inflation and in turn offset rising pressures from crude oil prices and sticky services inflation. According to the report, inflation would therefore average five per cent in fiscal 2017.
The report further said that an above-normal monsoon this year will augment groundwater and reservoir levels and in turn increase crop production. However, the rating agency warned that India is upbeat about robust monsoon reports but the country should tackle the structural issues in water usage.
The report said that the sensitivity of crops to rainfall signals the need for improvement in irrigation facilities, change in cropping patterns, harnessing of rainwater, and adoption of water conservation techniques and availability of stable electricity.