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India's monsoon economy

Less rain is forecast in India this year. That's a bad thing.

School students pray for rain on the rooftop terrace of their school building in the western Indian city of Ahmedabad June 26, 2009. Top left placard reads "If it rains now people will feel some relief" and top right, "May the rain god bring the shower so that life becomes prosperous". (Amit Dave/Reuters)

BANGALORE — It will soon be raining in India. But not enough.

Monsoon rains — which sustain India's economy, dictating food prices in this country of 1.1 billion — will be weak and below normal this year, the government recently announced. The announcement broke the government's official silence on the subject, and came after much speculation about the rainfall forecast.

Almost two-thirds of India’s population survives on rain-fueled farming. A poor monsoon season could kill the early opportunity for an economic revival, the signs of which were just beginning to show. Understandably, Prime Minister Manmohan Singh and his staffers are anxious.

“Scant rains will impact the purchasing power in rural areas and contract demand for products and services,” said Sundeep Waslekar, president of the Mumbai-based think tank Strategic Foresight Group. With the global recession, India is depending on domestic demand driven by rural buyers for overall recovery, he said.

In the past, hearty rainfall has led to bumper crops, boosted farmers' incomes and buoyed demand for goods including televisions and cars, shampoos and soaps. In recent years, rural consumers have driven growth in sectors such as telecommunications and consumer products, raising hopes for India’s economic recovery.

But a weak monsoon could disrupt everything.

Sidgangappa Golur, a millet farmer, has spent the last few weeks looking at the skies. “I can see the clouds but there are no rains,” said Golur, whose farms are located in a rural area near Tumkur town, three hours from Bangalore.

India’s four-month main rainy season starts in early June and runs through September. Called the South-West monsoon, these rains affect the production of rice, millet, sugarcane, oilseeds and cotton. Into the last week of June, the stop-start rainfall here has been 45 percent below normal. Desperate farmers have taken to prayers and rituals to gain favor from the rain gods.