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Saritha RaiJune 27, 2009 11:42Updated May 30, 2010 12:59

India's monsoon economy

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

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Recent forecasts by the World Meteorological Organization warned of an El Nino effect that leads to global sub-normal rainfall and droughts.

A weak monsoon will first diminsh production of food grains, and increase food prices, as 60 percent of cultivated land in India depends on the monsoon. Already, prices of daily staples such as wheat flour, tea, sugar and vegetables are rising.

There is also the matter of the new government’s post-election promises aimed at providing food security to the country’s poor. The government promised to supply 25 kilograms each of rice and wheat to poor families. A rising government food bill would send the already high fiscal deficit — currently at 6 percent of the gross domestic product — soaring.

India last saw a drought in 2004.

In the past, poor rainfall has increased the pressure on the government’s populist job program, which guarantees 100 days of employment every year to each village household. Farmers in rain-deprived areas have lined up to benefit from such pledges.

While it may be too early to sound the alarm, India's monsoons have previously played spoilsport in many a government’s well-laid plans.

Golur, the farmer, is worried about surviving the coming year if the rains are scarce. If the showers don’t arrive soon, he might have to head to the city to look for a job, he said.

Read more about weather:

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http://www.globalpost.com/dispatch/india/090624/indias-monsoon-economy

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