In Brief:
- July rainfall recovery supports farm output and rural incomes.
- Strong El Niño (1.94) poses risks, but a positive IOD (0.44) helps offset it.
- 16% overall deficit, with severe gaps in East (-30%) and South (-29%).
- Kharif planting lags last year, but momentum is improving.
- Storage at 38% capacity (70 BCM) provides a critical buffer.
According to a report by ICICI Bank, a pick-up in monsoon rainfall during July is set to support agricultural growth and boost rural incomes, despite risks from strengthening El Niño conditions.
While El Niño has intensified—with the R Niño 3.4 index reaching 1.94 near 2015 peak levels—a positive Indian Ocean Dipole (IOD) index of 0.44 is expected to partially offset its negative impact. Cumulative rainfall up to July 27 stood at 343 mm (16% below the long period average), but a recent surge in late July (27% above normal for the week ending July 26) helped narrow the deficit.
Distribution remains uneven across regions, with significant deficits in East India (30%) and South India (29%), compared to near-normal levels in Central and Northwest India. Consequently, Kharif crop sowing currently lags behind last year’s pace but is gaining momentum for pulses, oilseeds, and cotton, while live reservoir capacity stands at 38% (70 BCM across 150 reservoirs), offering a helpful buffer for upcoming week.
