Nearly six weeks after the Southwest monsoon that accounts for about 75% of India’s total rainfall arrived in Kerala, it is time to take stock of this age-old determinant of economic outcomes, especially in the country’s rural hinterland.
The sectoral composition of India’s economy has transformed over the years, with agriculture now making up only about 18% of gross value added, but this reduction in share has not been matched by a corresponding decline in the numbers who depend on farming.
As estimated, the farm sector supports almost 43% of India’s workforce today. No wonder the annual monsoon’s progress holds us in thrall year after year.
The good news is that our worst fears about 2026 being an El Niño year—when a pronounced tilt in warm equatorial waters from the Pacific Ocean’s western side to its eastern tends to give India a harsh summer and weak monsoon—have not been realized.
Some of the initial deficit in rainfall has been made up over the past week or so. The bad news is that although rains have now covered the entire country, its progress has been far from uniform.
According to the India Meteorological Department, rainfall is likely to be ‘subdued’ over large parts of the landmass over the next six-seven days. Region-wise, east and northeast India are the worst off, recording a deficit of 37% due to weak rains in Bihar, Jharkhand and five states of the Northeast.
Also, total precipitation is not all that counts. The spatial and temporal spread of rainfall is highly relevant to agriculture. And here, the harsh reality is that only about half our arable land is irrigated, leaving vast tracts reliant on seasonal rains.
Worse, irrigation facilities are largely concentrated in the relatively rich north-western part of India and some coastal states, which means poorer states suffer more from scanty rains. The impact of this year’s erratic rainfall, critical for the kharif season crop, is already visible in sowing data. The latest update, dated 6 July, shows that sowing is 21% lower than last year, with the shortfall higher in the case of pulses and oilseeds, both of which already stand out for high import dependency.
Cereal supplies are less of a problem. As reported, stocks of wheat and rice in the central pool are nearly four times the prescribed buffer norm. This offers a cushion against any scarcity-led price pressures. But as Indian diets move away from an overdose of cereals towards more pulses and other protein-rich foods, a poor domestic harvest of pulses may have a disproportionate effect on people’s cost of living.
Add to that a revival of uncertainty over oil supplies via the Strait of Hormuz, and general price volatility is hard to escape. Retail inflation was almost 4.4% last month, with food inflation not just higher, but looking up.
In such a scenario, the government bears the onus to relieve a potential rise in distress. Employment can make a difference. The Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission Gramin, which promises rural jobs, went into effect on 1 July. But several fiscally stretched state governments are reportedly reluctant to let it soak up funds, since the scheme is not fully funded by the Centre and they can suspend it during harvest season.
This tangle may need to be resolved swiftly. At midway point, the monsoon hasn’t suffered much of an El Niño dry-out, but it’s too early to relax our guard.