Deficit of 6% in the country overall; about 31% of India received less than normal rainfall
A normal and well-distributed monsoon is crucial for the 61 per cent of Indian farmers who are dependent on rains for practising agriculture. Photo: iStock The southwest monsoon season ended with rains that were 'below normal', the first in four years. India saw a rainfall deficit of six percent in monsoon 2023 of the long-period average of 50 years. This, however, doesn't clearly capture the erratic nature of its progression and distribution over India. Six states — Assam, Manipur, Mizoram, Jharkhand, Bihar, and Kerala — recorded major deficits.
Around 31 per cent of India received less than normal rainfall — 221 districts out of a total 718 — in the monsoon season of June to September. India is currently in an El Nino year. El Nino, the warmer-than-normal phase of the El Nino Southern Oscillation, phenomenon, is generally associated with less intense rainfall than normal during the monsoon season for India.
India receives 70-90 percent of its annual rainfall in these four months. A normal and well-distributed monsoon is crucial for the 61 percent of Indian farmers who are dependent on rains for practicing agriculture. Overall, 55 per cent of India's net sown area (139.42 million ha) is rain-dependent and grows 34 of the country's 40-odd major crops.
The monsoon has a direct impact on India's economy. A successful monsoon season boosts farm production and income of both farmers and labourers. This in turn has an impact on rural household incomes, which then stimulates demand for goods and services, especially rural demand.
Let's look at the kind of dent the disruptive monsoon has caused to different sectors.
Farmers have been facing crop losses in many states, including Karnataka, Uttar Pradesh and Jharkhand due to the uneven monsoon. As far as sowing is concerned, as of September 29, pulses, oilseeds and cotton have recorded a decline.
Pulses were sown in 5.41 lakh hectare less area, compared to 2022 in the corresponding period. All pulses — urad, moong, arhar and kulthi — have less acreage this time. Similarly, oilseeds have been sown in 3.16 lakh hectare less area. The harvesting of Kharif crops have begun and the extent of losses in total production will be clear in a few weeks.
Meanwhile, 8.68 lakh hectare crop area was affected by floods or heavy rainfall between April 1, 2023 and October 4, 2023.
Repeated crop losses due to deficit, untimely rain and anticipated lower harvest have led to increase in prices of essential commodities and also trade restrictions. Retail prices of rice, wheat and pulses were higher by 12 per cent, six per cent and 15 per cent as of October 4, 2023, respectively, year-on-year.
Meanwhile, wheat and non-basmati rice exports have been banned since May and July 2022, respectively, curbs have been imposed on onion exports and cut in import duties on edible oil and pulses. Reportedly, sugar is next on the export ban list, as lack of rain has cut cane yields.
Farm incomes have fallen, reducing rural consumption demand, which has a direct impact on various sectors of the economy. Companies have been reporting a dip in their revenue from fast-moving consumer goods like soft drinks, chocolates, soaps and toothpaste.
The other two indicators of the health of rural economy — sales of two wheelers and agricultural tractors — have also not been very impressive.
Tractor sales usually pick up in September as harvest time approaches, but the registrations in September indicate a declining trend amid sluggish kharif acreage. There were just 49,007 registrations of agricultural tractors in September 2023, compared to 68,431 in August and 84,473 in July, as per the government's VAHAN dashboard.
Actual sales figures, available through August with the Tractors Manufacturers Association (TMA), also show that the sales volume has decreased from 58,583 tractors sold in July to 53,249 in August.
The year-on-year growth of tractor sales in August was just 1.1 per cent, compared to 6 per cent in July and 4.2 per cent in June. Meanwhile, the year-on-year increase in sale of two-wheelers was 0.6 per cent in August.
The all-India unemployment rate (UR) edged up to 8.1 per cent in August 2023 from around seven per cent in June 2023 on account of higher UR in urban areas while rural unemployment fell, as per Reserve Bank of India's September 2023 bulletin.
Fewer opportunities in the job market has led to more demand for work under Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), India's rural employment programme. Leaving aside the COVID-19 years, the demand for work under it has surged to its highest in a decade in 2023-2024, even spiking over the monsoon season, which is a lean period for the scheme, according to government data.
DTE analyzed 24 states with low deficit or deficient rainfall since June 1, 2023, of which the majority reflect this trend.
Till September 2023, about 48,280,853 households have availed of rural employment, against the demand of 53,373,911. For September, Kerala has received a demand from 10,15,628 households, compared to a demand from 9,55,221 houses during the COVID year of 2020-2021.
The 2023 monsoon ended with live water storage at 74 per cent of the capacity of India's 150 major reservoirs. This is less than the corresponding period of last year in the country as a whole and also less than the average storage of the last 10 years during the corresponding period.
The water from many of these reservoirs is used for irrigation purposes in the Rabi season, which doesn't see much rainfall, and low reservoir levels could impact Rabi crops, the sowing for which will start in a few days.
The reservoirs in the southern region seem to be most affected, with the available storage being at just 50 per cent of the capacity of its 42 major reservoirs.
States that have less storage than last year for corresponding period include Punjab, Rajasthan, Tripura, Maharashtra, Uttar Pradesh, Madhya Pradesh, Chhattisgarh, Andhra Pradesh, Karnataka, Kerala and Tamil Nadu.
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