On 4 April 2011, I had written a post entitled “The Indian Budget is a Gamble on the Monsoon”: Who Said It? Here is an extract from that post:

“The Indian budget is a gamble on the monsoon” is a clichéd statement that has been made repeatedly for more than a hundred years. Even very recently, when Finance Minister Pranab Mukherjee presented the budget for the fiscal year 2011-12 to the Indian parliament, he had to invoke the blessings of Lord Indra, the god of rain, although he did not precisely call his budget a gamble.

The gamble comes into the game because of four factors:
(1) the Indian fiscal year begins on 1 April and ends on 31 March of the next year,
(2) the budget for the fiscal year has to be prepared by February end,
(3) the southwest monsoon arrives over the country on 1 June on an average, and
(4) it has never been possible to make a successful prediction of an all-India drought.

Today, however, when  India’s new Finance Minister Arun Jaitley read out his budget proposals for the remainder of the fiscal year 2014-15, the situation was very different from that in 2011-12.  For once, the budget had not been presented three months before the expected arrival of the monsoon, but 5 weeks after its actual arrival. In April itself there were indications that the monsoon would be weak this year and this was confirmed in early June on the basis of more substantive data.

I am neither an economist nor a political analyst. But I have a simple question for my more knowledgeable readers: Is there a hint, or perhaps more than a hint, of an impending weak monsoon having been factored into the budget? Had there been no threat of the developing El Nino, no predictions of subnormal rainfall, no 40% deficit in June rainfall, would the budget have been bolder or tougher, or would the road map have been different?

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