09 July 2026
Today we touch on our nation’s favourite conversation – the weather. While the United Kingdom, Europe and America are all experiencing record or near record temperatures there are equally adverse conditions across the Indian subcontinent.
The monsoon season runs from June to September. It has not started well. June rainfall (which accounts for nearly 20% of the season) was 100mm, 40% below normal levels and the third lowest in a century. The Indian met office is already forecasting lower than average July rainfall.
Historically years with monsoon deficits exceeding 10% (2009 & 2014) have seen weaker real agricultural growth, typically ranging between -1% and +1%, which falls a long way short of the 4% long term average.
Early crop sowing data is down almost 25%, but the bulk of sowing occurs in July. The good news is that reservoir levels are 26% higher than their long-term levels thanks to two consecutive surplus monsoons.
While the industrialisation and urbanisation over the past few decades have reduced the sector’s importance in terms of GDP, it remains a very large employer. For the year to March 2026 both rural wage growth and rural CPI climbed roughly 4% leaving real rural income flat.
Spending on the VB-GRAM-G rural employment scheme is likely to rise which increases the fiscal burden. Past droughts have also seen diesel and seed subsidies.