New Delhi: Monsoon rains during June and July were at their worst level since 2004, 19% below the seasonal average, prompting analysts to warn that these were near- drought conditions.

Shortfall: Rainfall in July, the key monsoon month, was close to its 50-yr average of 27cm, IMD says. Rupak De Chowdhuri/Reuters

“July has seen typical drought conditions," said Madhavan Rajeevan, former director of forecasting with the India Meteorological Department (IMD). “The next week is unlikely to see improved activity, and by then sowing would have pretty much drawn to a close. By September, the effects of El Nino would be evident. So in a sense, the best is far behind us." El Nino is a weather phenomenon characterized by a warming of the eastern equatorial Pacific Ocean waters and can disrupt normal monsoon patterns.

Rainfall during July, India’s most important monsoon month, was close to its 50-year average of 27cm, the country’s official forecaster said on Thursday. IMD, in the last week of June, had predicted July rainfall for the country to be around 24cm. “We got excess rain in July and we are still optimistic that August should fall within our prediction of 101% of its monthly average," said Ajith Tyagi, director of IMD.

India’s below-normal monsoon has caused a significant decline in the area under foodgrain cultivation, a trend that, if it lasts, could trigger a rise in food prices. Food price inflation based on the Wholesale Price Index for the week ended 18 July was 11.7%, while the overall inflation rate continued to contract at 1.54%.

Agriculture minister Sharad Pawar had told the Rajya Sabha last Friday that the area sown under rice in the year as on 17 July fell to 11.46 million ha, from 14.52 million ha in 2008, a fall of 21%.

Farmers have begun substituting foodgrain with cash crops, which require less water. Overall, the area under the summer kharif crop cultivation contracted by 8%.

Experts warn that this is among the first signs of the negative impact of the monsoon rainfall’s failure on the country’s agricultural gross domestic product, but say a conclusive picture will emerge only by January.

The June-September monsoon accounts for nearly 80% of the annual rainfall and is vital for the economy, being the main source of water for agriculture, which accounts for around 17% of India’s economy.

The current year’s monsoon is considered to be crucial for the economy as buoyant rural consumption has been a key driver of growth amid an economic downturn. While the country has sufficient food stocks to tide over any crisis this year, the rise in food prices that will follow a poor monsoon and, consequently a poor harvest, could wreak havoc on the economy.

A report by credit ratings firm Moody’s expressed concern that a poor monsoon may slow India’s economic recovery. “The monsoon problem is unlikely to be strong enough to derail India’s economic recovery, but it could drag on the pace. India’s rural population accounts for a large share of total consumption... Therefore, a sizeable slowdown in rural spending will limit overall consumption growth," the research arm of Moody’s said in its latest report.