Finance Minister Arun Jaitley on Thursday said foreign investors have not lost interest in India and the concerns over forecast of weak monsoon were “misplaced”.
Talking to media persons here, Jaitley said the forecast of deficit rain during the monsoon this year will not have any significant impact on food production owing to geographical distribution of the rainfall.
He said the forecast of rainfall appears to be on closer side of normal in south and central India and in the northeast, and there was “slight inadequacy, if at all” in the northwest.
Jaitley, however, noted that a large part of northwestern India, including Punjab, Haryana and Uttar Pradesh, has substantial irrigation facility.
“On account of geographical distribution, the impact on food grain production may not be very significant. There was similar pattern last year. Advance predictions are somewhat better than last year. In any case, there is abundance of food grains available,” he said.
These conclusions were drawn in an “exaggerated manner”, he said.
Noting that the government prevented “any inflationary trend in food management” last year, Jaitley said: “For anybody to draw conclusion of inflation, some kind of distress situation is far fetched.”
He said the kind of speculation that “we have been seeing and the speculative analysis that we have been reading about (monsoon) appears to be somewhat misplaced.”
Science and Technology Minister Harsh Vardhan had earlier said that rainfall this monsoon was likely to be deficient with 88 (plus or minus 4) percent of the long period average (LPA).
“The latest forecast is bothering me… let’s pray to god that the forecast does not come true,” he had said.
The rainfall was likely to be 85 percent of LPA over northwest India, 90 percent of LPA over central and northeast India, and 92 percent over the southern peninsula with a model error of plus or minus 8 percent.
Answering queries from media persons, Jaitley said the economy was improving and there was more stability than before.
“I don’t think they (foreign investors) have lost interest in India.
“As far as the markets are concerned, it’s a day-to-day trend and that it will not last. The economy is improving and the government’s disinvestment plans are also on track,” he said responding to queries about Sensex.
The Indian equities markets are on a downslide since Reserve Bank of India Governor Raghuram Rajan a couple of days back said below-normal monsoons posed the biggest risk to the economy.