IMD predicts normal monsoon in 2017

Southern states still have reason to worry

by Saher Naqvi

The India Meteorological Department (IMD) on 18 April 2017, predicted the southwest monsoon in 2017 to be normal with fair distribution across the country. Even as this forecast may bring some cheer to farmers in the country, the southern states have little reason to rejoice.

The IMD has forecast rainfall to be 96 per cent of the long period average (LPA) with a model error of +/- five per cent. Central India and western parts of the country are likely to receive good rainfall. However, according to the IMD, rainfall may be somewhat deficient in the north-east and parts of the southern peninsula, including Rayalseema region of Andhra Pradesh and Tamil Nadu.

The IMD had forecast above normal rainfall in 2016 at 106 per cent of the LPA. Even though the country witnessed normal rainfall at 98 per cent of LPA, Karnataka, Kerala, Andhra Pradesh, Tamil Nadu, and the north-eastern states received deficient rainfall. Out of the five southern states, four have been reeling under severe drought. If rainfall in these states continues to be deficient in 2017 as it has been in 2016, the problems are likely to worsen.

Reservoirs in the southern region have a capacity to hold 51.6 billion cubic metres of water. The current storage levels however, have dipped to 12 per cent of that capacity. During the corresponding period last year, the reservoir levels were at 15 per cent of the capacity, while the ten year average storage for the same period was 23 per cent. This shows the precarious water conditions in these states.

Reservoir levels (% of live storage capacity)
States 2017 2016 2015 10 yr avg
Karnataka 13.6 18.7 30.2 33.3
Kerala 24.3 38.4 51.5 48.2
Tamil Nadu 6.7 21 33.1 38.7
Andhra Pradesh 10.5 16.2 3.8 36.3
Telangana 8.1 2.4 8.5 23.5

Barring Andhra Pradesh and Telangana, all other southern states have been badly drought-affected. Kerala is witnessing the worst drought in 115 years with the southwest monsoon recording a deficient rainfall of 33.7 per cent below LPA. The northeast monsoon also did not provide any relief to the state, recording 61.5 per cent deficient rainfall, thereby worsening the water crisis in the state.

In Tamil Nadu, all 32 districts have been declared drought-affected. The state has recorded deficient rainfall during the southwest monsoon with a deviation of 18.7 per cent below the LPA. The northeast monsoon has also been very poor, recording 62 per cent deficient rainfall, which is the worst the state has seen in 140 years.

Karnataka is facing the third consecutive year of drought and the worst one in four decades. 160 of the 172 taluks have been declared drought-hit as both the southwest and northeast monsoon rainfall has been deficient at 14.6 per cent and 71.4 per cent, respectively.

These conditions may have an impact on the forthcoming kharif season. The south-west monsoon is critical to the kharif crop season as India receives 80 per cent of its annual rainfall from the southwest monsoon. A subpar monsoon may lead to lower acreage under key kharif crops, which may also cause a fall in agricultural production. Major crops that may be affected include rice, sugarcane, arhar and maize.

Major kharif crops sown
States Major kharif crops
Karnataka Maize, Arhar(Tur), Rice, Ragi
Kerala Rice
Tamil Nadu Rice, Sugarcane, Jowar
Andhra Pradesh Rice, Arhar(Tur)
Telangana Rice, Maize

CMIE STATISTICS
Unemployment Rate
Per cent
4.0 +0.0
Consumer Sentiments Index
Base September-December 2015
99.3 +0.2
Consumer Expectations Index
Base September-December 2015
101.5 0.0
Current Economic Conditions Index
Base September-December 2015
96.0 +0.5
Quarterly CapeEx Aggregates
(Rs.trillion) Jun 16 Sep 16 Dec 16 Mar 17
New projects 1.45 2.35 1.42 2.80
Completed projects 0.90 2.19 0.87 1.38
Stalled projects 1.40 0.64 1.01 0.32
Revived projects 0.43 0.51 0.17 0.62
Implementation stalled projects 0.50 0.57 0.80 0.26
Updated on: 26 Apr 2017 12:20PM
Quarterly Financials of Listed Companies
(% change) Mar 16 Jun 16 Sep 16 Dec 16
All listed Companies
 Income -0.1 -0.9 2.1 6.4
 Expenses 0.9 -0.3 1.9 6.7
 Net profit -29.1 -4.1 14.7 36.5
 PAT margin (%) 4.9 6.9 6.9 6.0
 Count of Cos. 4,516 4,487 4,471 4,433
Non-financial Companies
 Income -2.1 -2.5 0.6 6.1
 Expenses -3.9 -2.9 -0.2 7.6
 Net profit 5.0 9.6 26.8 20.6
 PAT margin (%) 6.2 7.4 6.9 6.1
 Net fixed assets 4.0 -9.2
 Current assets 3.2 8.1
 Current liabilities 10.7 11.6
 Borrowings 6.9 3.1
 Reserves & surplus 7.8 8.4
 Count of Cos. 3,518 3,497 3,482 3,459
Numbers are net of P&E
Updated on: 26 Apr 2017 12:29PM
Annual Financials of All Companies
(% change) FY13 FY14 FY15 FY16
All Companies
 Income 12.0 9.6 4.9 0.8
 Expenses 12.2 9.5 4.9 1.0
 Net profit 1.2 -3.7 2.2 -13.7
 PAT margin (%) 3.6 3.2 3.2 3.1
 Assets 14.1 12.3 9.1 8.2
 Net worth 9.5 9.6 8.5 7.2
 RONW (%) 6.8 6.0 6.0 5.4
 Count of Cos. 23,921 21,271 20,226 16,111
Non-financial Companies
 Income 11.3 9.3 4.0 -0.3
 Expenses 11.6 8.9 4.1 -1.0
 Net profit -8.5 -5.0 -4.1 11.3
 PAT margin (%) 2.4 2.1 2.1 2.8
 Net fixed assets 12.8 11.5 12.9 12.4
 Net worth 7.7 8.5 7.0 6.5
 RONW (%) 5.5 4.8 4.8 5.7
 Debt / Equity (times) 1.1 1.1 1.1 1.0
 Interest cover (times) 2.1 1.9 1.9 2.1
 Net working capital cycle (days) 72 69 68 68
 Count of Cos. 18,454 16,748 15,978 13,008
Numbers are net of P&E
Updated on: 21 Apr 2017 9:39AM

Don't rejoice yet; watch out for El Nino risks

Investments concentrated in a handful of big-ticket projects

Projection revised upwards to incorporate surreal Q3 official statistics