The IMF working paper has tried to dispel some fears associated with the weather phenomenon As the government gears up to face the adverse impact of El Niño on the monsoon, an International Monetary Fund (IMF) working paper has tried to dispel some fears associated with the weather phenomenon. IMF said the negative impact of El Niño is rather muted in India over the past few decades due to a number of factors, which include declining share of agriculture in India’s gross domestic product, the increase in contribution of rabi crops and the decline in the contribution of kharif crops. The rise in total irrigated area in the country for major crops from 22.6 million hectares in 1950-51 to 86.4 million hectares in 2009-10 is another factor, which lowers the impact of El Niño induced monsoon on India’s annual GDP. “Moreover, due to more developed agricultural markets and policies, rising agriculture yield, and climatological early warning systems, farmers are better able to switch to more drought-resistant and short-duration crops (with government assistance), at reasonably short notice,” the working paper released on Tuesday said. It added that any severe rainfall deficiency in India could have implications for public agricultural spending and government finances. But, an El Niño year has not always resulted in weak monsoons in India, the report said. El Niño conditions usually coincide with a period of weak monsoon and rising temperatures in India, which is seen to have an impact the agriculture sector and increases domestic food prices. The paper also noted that production of fruits and vegetables in India is affected less by monsoon than food grains. “Inflation in food grains has historically been affected by government procurement policies and administered minimum support prices in agriculture,” IMF noted. During the last decade, inflation increased sharply after the 2009 drought in India, however, in the previous episodes of drought in 2002 and 2004, inflation remained subdued. In 2009, drought conditions were accompanied by a steep increase in minimum support prices, resulting in high food grain inflation and consequently higher CPI inflation. Overall, government policies, tight monetary stances, high water reservoir levels, and excess food grain stocks could partly offset the inflationary impact of El Niño shocks on prices in India, IMF said. The India Meteorological Department (IMD), in its first forecast for 2015 southwest monsoon released last month, said rains this year is expected to be below normal at 93 per cent of the long period average (LPA) because of El Nino weather phenomenon. The forecast is with a model error of plus and minus 5 per cent. LPA is the average rainfall that the country received between 1951 and 2000 estimated to be 89 centimeters. If true, this would be the second consecutive year when southwest monsoon will be below normal. In 2014, the rain was around 12 per cent below normal, which lowered kharif foodgrain production by around 9 million tonnes as compared to the previous year. The Met office said in 2015, north and Central India are expected to get less than normal rains, while it might be normal in peninsular India.