IMD sees below-normal August-September rains, reviving inflation fears
The India Meteorological Department (IMD) has forecast below-normal rainfall for August and September, raising concerns over kharif crops, food inflation, and rural demand. The forecast follows a volatile start to the southwest monsoon, with June rainfall 35.4% below the …
Intelligence analysis by Llama
The IMD's forecast of below-normal rainfall for August and September has raised concerns over kharif crops, food inflation, and rural demand. Economists say a weak monsoon could hit farm incomes, rural demand, and food prices, with the economy more resilient than in the past but still vulnerable to inflationary pressures.
Imagine India's monsoon season as a big test. The weather office has forecast that the monsoon will be below normal for August and September, which means that some areas might not get enough rain. This could affect the crops that farmers grow, and make food prices go up. It's like a big puzzle, and the weather is one of the pieces that can make it harder or easier to solve.
Analysis
A Volatile Start to the Monsoon Season
The India Meteorological Department (IMD) has forecast below-normal rainfall for August and September, raising concerns over kharif crops, food inflation, and rural demand. The forecast follows a volatile start to the southwest monsoon, with June rainfall 35.4% below the Long Period Average (LPA) before rebounding to 1% above normal in July.
The IMD's director general of meteorology, Mrutyunjay Mohapatra, said that July witnessed a substantial improvement in monsoon performance compared to June. The share of districts with normal or better rainfall increased from 30% (224 districts) in June to 53% (388 districts) in July, while deficient and large deficient districts declined from 69% (508 districts) to 46% (344 districts).
Inflation Risks
Economists say a weak monsoon could hit farm incomes, rural demand, and food prices, with the economy more resilient than in the past but still vulnerable to inflationary pressures. Gurudas Nulkar, director at the Centre for Sustainable Development, Gokhale Institute of Politics and Economics (GIPE), Pune, said that if rainfall remains around 94% of the LPA and deficits are concentrated outside major food-producing states, the economic impact is likely to be manageable.
However, Anjal Prakash, professor of public policy at FLAME University, Pune, warned that a below-normal August monsoon is unlikely to derail India's overall growth story but does raise risks for agriculture, rural demand, and food inflation. He added that the immediate concern is not a collapse in growth but a hit to farm incomes and food prices.
Sowing Under Pressure
The finance ministry's July Monthly Economic Review said kharif sowing has moderated because of the weak start to the monsoon and warned that a projected transition to El Niño poses downside risks, although strong paddy and wheat buffer stocks provide some protection. Kharif sowing remains behind last year's pace, with farmers having planted crops across 78.7 million hectares as of 24 July, compared with 82.6 million hectares a year earlier, according to agriculture ministry data.
Acreage under paddy, pulses, oilseeds, and cotton remains below last year's levels, although the gap has narrowed as rainfall improved. About the Author Vijay C Roy Vijay C. Roy is a journalist with over 21 years of experience covering various news beats across different organisations such as Business Standard and The Tribune. In the past, he has covered beats such as finance, auto, MSME, commodities, FMCG, pharmaceutical, agriculture, IT/ITES, infrastructure and start-ups. He joined Mint in February 20
Key points
- The India Meteorological Department (IMD) has forecast below-normal rainfall for August and September.
- The forecast raises concerns over kharif crops, food inflation, and rural demand.
- Economists say a weak monsoon could hit farm incomes, rural demand, and food prices.
- The economy is more resilient than in the past but still vulnerable to inflationary pressures.
- Kharif sowing remains behind last year's pace, with farmers having planted crops across 78.7 million hectares as of 24 July.
If the rainfall deficit persists, the government may need to compensate for the loss of kharif crops, which could lead to increased spending and boost rural demand. Additionally, strong paddy and wheat buffer stocks provide some protection against the risks posed by a weak monsoon.
A prolonged period of below-normal rainfall could lead to a significant decline in kharif crops, resulting in higher food prices and a hit to farm incomes. This could also lead to a decrease in rural demand, which could have a ripple effect on the overall economy.
