Ashika Monthly Insight Flip July 2016

JULY 2016
ECONOMY REVIEW
Source: IMD
estimates are for 106% of the long-period average (LPA),
the monsoon is expected to have spread across whole of
India by end of June. Considering that ~50% of the
country’s workforce depends on agriculture for a living
and over half of India’s farmland lacks assured irrigation,
monsoon is of paramount importance. Besides, the food
inflation has failed to be tamed over the last two years
mainly on account of two failed monsoons barring the
issues with hoarders or middlemen. Thus, clearly the
latest set of rainfall figures raises obvious doubts
regarding the authenticity and the effectiveness of the
forecasting methods or set of results drawn by IMD and
as well as Skymet.
There are various analyses available to understand the
success of the IMD’s accuracy in forecasting over the
years. Unfortunately, most of them have come up with
unpleasant results and the accuracy of forecasting have
been kept wanting. In fact, an analysis titled “What to
make of the latest IMD monsoon forecast?” was carried out
by The Hindu based on 10 years of forecast data. The
analysis showed that the IMD’s initial April forecast got the
‘rainfall range’ wrong 70% of the times. This essentially
means that in 7 out of 10 years, the actual rainfall has
been outside ± 5% error margin range. On the other hand,
the revised June-July forecast, often regarded as a more
accurate monsoon forecast got the ‘rainfall range’ wrong
60% of the times. Besides, at times when IMD predicts for
‘below normal’ monsoon, it could often turn out to be
‘deficient’ or above normal to devastating floods. IMD
classifies its rainfall forecast into five ‘ranges’ based on the
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