It is official. Four states are facing a drought and rainfall is seen at 92 percent of long period average.
The India Meteorological Department had said earlier that rainfall in the country was 22 percent below normal until 18 July. Today it revised downwards its rainfall estimate to 92 percent from the earlier 96 percent.
Karnataka, parts of Maharashtra, Gujarat and Rajasthan are under absolute threat of drought, food minister KV Thomas told The Times of India in an interview.
The situation will be clear only in another 15 days, he said.
This is no good news, especially when the Reserve Bank of India is about to review its policy on 31 July.
The bad monsoon is already pushing up prices. Towards the year end the situation is going to be worse.
With the RBI time and again reiterating that it would sacrifice growth to control inflation, a rate cut is unlikely in the near future.
A Times of India report today said the inflation is likely to touch 8 percent if the deficiency in rain continues.
The prices of food are going to be worrisome for the next two-three months as it will decide the course of inflation, Samiran Chakraborty, regional economist at Standard Chartered Bank, has been quoted as saying in the report. He expects inflation to hit 8 percent soon and rules out any possibility of a rate cut by the central bank in the 31 July policy review.
“The latest sowing data available from the Ministry of Agriculture shows shortfall in area sown across all the major categories of kharif crops,” Monsoon Meter of the NCDEX said.
In case of cereals, the area sown is around 136.6 lakh hectare, 29 percent less than normal.
Similarly, in case of pulses it is around 20.54 lakh ha, which is 38 percent less than normal. Oilseeds sowing has lagged by 14 percent with area sown so far at 67.7 lakh hectare.
Rice cultivation has declined 10 percent to 14.5 million hectares this year from 16.1 million hectares a year earlier, the farm ministry said July 20, according to a Bloomberg report. Cotton sowing fell to 8.37 million hectares from 9.24 million hectares.