Weak monsoon threat looms; food inflation fears rise

New Delhi: Trends show that moderate or stronger El Nino events often coincide with weak monsoons, said a report by rating agency Care, which said India may see a below-normal monsoon season with the onset of El Nino.

The report stated that rainfall was insufficient in 12 of the 16 El Nino years.

However, the report also noted that the impact of rainfall variability on agriculture and overall gross value added has weakened over time due to better irrigation coverage, resilient crop varieties and the increasing share of services in the economy.
While agriculture is smaller in terms of its share of production, it still employs 43% of India’s workforce, making monsoon performance vital to rural demand and livelihoods.

Lack of rainfall can also increase food inflation, especially in perishable products such as tomatoes, onions and potatoes.