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Arrival of the auspicious girl

The transition from El Nino to La Nina implies higher rainfall and increased food production

Arrival of the auspicious girl

El Nino ('the boy' in Spanish) refers to a weather pattern involving the warming of the sea in the central and eastern Pacific Ocean. Its diametric opposite is La Nina ('the girl'), which involves the cooling of the sea. Both El Nino and La Nina are phases of a broader weather pattern called the El Nino-Southern Oscillation [ENSO], which also has a neutral third phase. The three phases may last anywhere from a few months to a couple of years.

The Indian connection
The ENSO phenomenon directly affects rainfall in India. While El Nino generally decreases the amount of rainfall India receives, La Nina results in adequate to surplus precipitation. In 2014, rainfall in India was 12 per cent below its 50-year average followed by a 14 per cent deficit in 2015. Most sources suggest that El Nino is now over and the neutral phase has begun. The Australian Bureau of Meteorology further predicts a 50 per cent chance of La Nina occurring later this year. This is in line with Indian Meteorological Department's observations of above-average rainfall in India during the current monsoon season, with more rain predicted in August and September.

The impact
India's economic growth is directly tied to its farms as the majority of India's population still continues to rely on agriculture to earn a living. The relationship between agriculture and income is made further complicated by the lack of a proper irrigation system. According to the CIA World Factbook, nearly 49 per cent of India's total workforce is employed in agri-related activities but contributes just 16 per cent of the country's GDP.
In March 2016, IMF published a report stating that El Nino years are marked with increased inflation and declining economic activity in India, a situation India faced between 2013 and 2015. Conversely, sectors closely tied to rural consumption such as tractors, fertilisers and FMCG should benefit from the higher rainfall associated with a La Nina occurrence. La Nina will also boost hydropower generation and lower input costs, implying higher industrial profits. Food comprises nearly 46 per cent of India's consumer-price inflation, so lower food prices imply lower inflation, which means further rate cuts.