With delayed monsoon, India may have to suffer a major agriculture crisis, as 60 per cent of Indian agriculture is rain-fed and a delayed and deficient monsoon would mean lower agricultural output. This in turn would impact corporate India, as rural consumption would be hit.
The Meteorological Department estimates that rainfall so far has been 45 per cent below normal.
The onset of monsoon in large rain-dependent agricultural states of central India has been delayed, forcing water levels to fall sharply and hampering irrigation in many parts.
While the Met Department is still hopeful of a revival in the southwest monsoon in the crucial month of July, analysts are already beginning to worry about the impact of weak monsoon.
Sventeen per cent of India's GDP still depends on the agriculture sector and 60 per cent of agriculture remains rain- dependent. A weak monsoon would mean lower agricultural output.
Leading financial services firm JP Morgan warns that consumption falls in weak monsoon years.
Citigroup, a major American financial services company based in New York, says a poor crop will push food inflation even higher.
Brokerage and investment group CLSA warns that pressure to support the farm sector could impact the government's finances.
Apart from the economic impact, a weak monsoon could also put pressure on corporates by denting India's rural consumption story, but for now corporates find little reason to worry.
A lot will depend on the progress of monsoons in crucial month of July which brings a bulk of the monsoon rains. The hope, for now, is that the weekend return of the rains will mean that the rain gods are set to shine in a year when the economy is facing enough headwinds.
Temperatures across the nation:
The entire country is reeling under the heat wave. The Met. Dept. has issued a severe heat wave warning across north and central India.
UP has been consistently recording temperatures above 40 degrees.
So is Bihar, where water scarcity is adding to the heat trauma
Jharkhand is reeling at 44 degrees.
Temperatures are about 5 degrees above normal in Orissa.
Chhattisgarh is scorching at 44.
In MP too, water woes are adding to the crisis.
Vidarbha is above 40 degrees for the past 7 days. So is Rajasthan.
No respite in Delhi at 43 degrees and intermittent powercuts