NEW DELHI: The monsoon has revived significantly in the past week and accelerated crop planting, but the government is anxiously monitoring the situation as crop yields may still be lower and economists warn that food prices can rise sharply if rainfall weakens again.

Rainfall in the past week has been the highest so far this season, narrowing the total deficit to 22 per cent from 31 per cent as the monsoon advanced rapidly to cover the entire country on Wednesday, four days before the normal date of July 15.

However, rainfall has been uneven, with some regions, including parts of Karnataka and Maharashtra, remaining practically dry for three weeks. These regions are facing a shortage of drinking water, but the situation in the rest of the country has improved significantly in the past 10 days, Agriculture Minister Sharad Pawar said. “There is no cause of concern as of now. But always, there are concerns until the farmer takes home the harvest,” he said.

While rainfall has improved, economists said any deviation in the future would lead to high inflation and limit the central bank’s options for lowering interest rates. But the impact on overall consumption, demand and economic growth may not be severe because the government’s employment guarantee scheme and infrastructure spending have significantly raised the non-agricultural component of rural income.

“Clearly, food inflation and power situation are two problems we are staring at,” said Samiran Chakraborty, chief economist at Standard Chartered.

Contingency plans in the works

The situation is more of a delayed monsoon rather than a drought,” said Chakraborty. “If the situation worsens and we get a full-fledged drought, then we are starting off with a lot of macro headwinds, with slowing growth and high inflation already there,” he said.

ET reported on July 3 that the country was on the brink of a power and drinking water shortage, but the situation can be retrieved if rainfall improves. The government is taking steps to tackle the situation, and states have been advised to implement contingency plans if rainfall is weak till July 15. Karnataka has already activated its contingency plans to help farmers plant short-duration crops while the Indian Council of Agricultural Research has advised farmers in Bihar to plant early-maturing paddy and told farmers in Rajasthan to plant pulses and oilseeds instead of coarse grains. Short-duration crops usually have lower yields, but help farmers withstand adverse weather.

Source: Economic times

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