UPSC Desktop Banner

Daily News Analysis ‘Weak Monsoon Clouds India’s Economic Outlook’ : 7 July

Why in News:

  • The India Meteorological Department (IMD) has forecast below-normal rainfall in July, raising concerns over agriculture, inflation and economic growth amid possible El Niño conditions.

Weak Monsoon, El Niño & Economy: Key Facts

  • Weak Monsoon: Rainfall below 94% of the Long Period Average (LPA); directly affects agriculture, water resources and rural economy.
  • El Niño: Periodic warming of the central and eastern equatorial Pacific Ocean, which weakens the Indian Summer Monsoon.
  • How Weak Monsoon Affects Economy:
    • Lowers kharif crop production and agricultural Gross Value Added (GVA).
    • Reduces rural incomes, weakening demand for tractors, two-wheelers and consumer goods.
    • Raises food inflation, especially cereals, vegetables and edible oils.
    • Increases imports of food commodities, widening the Current Account Deficit (CAD).
  • Agriculture’s Role: Contributes about 18% of India’s Gross Value Added (GVA), employs nearly 46% of the workforce and supports over 55% of the population.
  • Past El Niño Years: Major drought years include 1972, 1982, 2009 and 2015; associated with lower crop output and inflationary pressures.
  • Impact on Livestock: Heat stress lowers milk production, fodder availability and animal productivity.
  • Water Storage: Reservoir storage remains a critical buffer; low monsoon can strain irrigation, drinking water and hydropower generation.
  • Climate-Resilient Measures: Expand irrigation, drought-resistant crop varieties, efficient water management, early warning systems and climate-resilient agriculture.
  • Unique Fact: Around 60% of India’s net sown area remains rain-fed, making the economy highly sensitive to monsoon variability despite expanding irrigation.