India's Rain to Be Weakest Since 2002 Drought

India's monsoon season, which brings 73 percent of the nation's annual rainfall, may be the driest in seven years, a weather bureau official said, paring farm output in the world's biggest producer of sugar, rice and wheat.
"It's going to be more like 2002 situation," said Ajit Tyagi, director general at the India Meteorological Department, referring to the year when the nation faced its worst drought in 15 years. Rains were 19.2 below average that year.
Lower farm output may erode incomes of 742 million people living in the villages, hurting Prime Minster Manmohan Singh's efforts to push growth back to a 9 percent pace. The drought in 2002 cut economic growth to 3.8 percent, the lowest in 11 years.
"Recent experience suggests that as rain deficiency moves beyond the threshold range of 10-to-15 percent, the incremental damage to agriculture is much more than proportionate," said Siddhartha Sanyal and Dipti Saletore, economists at Edelweiss Securities Ltd. in a note yesterday. "We seem to be approaching that tipping point."
Inadequate rain may shave as much as one percentage point off the nation's economic growth this year, said Raghuram Rajan, an adviser to Prime Minister Manmohan Singh. A 20 percent rain shortfall may chop 2 percentage points off the economic growth, Philip Wyatt, a senior economist at UBS AG in Hong Kong, said.
The deficit since the start of this season on June 1 has widened to 29 percent as of Aug. 12, from 25 percent a week ago, Tyagi said from Pune today. Falls were 43 percent below average in the northwest region, which include the top grain producing states of Uttar Pradesh, Punjab and Haryana, while the shortfall was 23 percent in peninsular India, which includes Maharashtra, the top grower of sugar cane and cotton, the bureau said today.