Build resilience, account for costs, Pg12

Key Highlights:

• The India Meteorological Department (IMD) forecasts a "below normal" southwest monsoon, with only 92% of the long period average rainfall expected.
• This prognosis is based on the high probability of El Niño conditions emerging in the second half of the monsoon season (June-September).
• India has ample food stocks of 60.4 million tonnes as of April 1, exceeding last year's 50 mt and the minimum buffer of 21 mt.
• India is shifting towards a "just-in-case" strategy, prioritizing long-term resilience over short-term efficiency.

Detailed Insights:

• Ample food stocks act as a shield against external shocks like weather events, pandemics, financial meltdowns, and wars.
• During Covid, foodgrains proved to be the most effective social safety net, highlighting the importance of strategic reserves.
• India has built massive food and forex reserves, along with strategic petroleum reserves of 5.3 mt, indicating a focus on resilience.
• The "just-in-case" strategy prioritizes resilience to withstand unexpected supply chain disruptions, unlike the "just-in-time" approach.
• Building resilience involves costs, including fixed capital, inventory holding, operational charges, and potential quality loss of stored goods.
• Maintaining forex reserves also incurs costs, as they are typically invested in low-yielding safe assets.
• Climate change and geopolitical instabilities necessitate resilience-building, but it's crucial to recognize and account for the costs involved.
• A significant portion of national resilience budgets is funded by taxpayer money, emphasizing the need for efficient spending and full accountability.

Key Concepts Involved:

• El Niño: A climate pattern describing the unusual warming of surface waters in the central and eastern tropical Pacific Ocean.
• Monsoon: Seasonal change in the direction of the prevailing winds of a region, causing distinct wet and dry seasons.
• Just-in-time strategy: A strategy focused on efficiency, minimizing waste by producing goods only when needed and stocking just enough.