Weak monsoons have resurfaced as another macroeconomic risk from growth as well as inflation angle, according to latest report released by Crisil on latest Monsoon situation in the country.
Uttar Pradesh and Bihar are worst impacted as they have not only faced severe rainfall deficiency but also have low irrigation buffer, the rating agency says.
In addition, these states have high incidence of rural poverty and high dependence on agriculture. Taken together Uttar Pradesh and Bihar account for about 16% of the country’s agricultural GD. Tur, maize, jowar, bajra and rice are the most adversely impacted crops.
The rating agency measures the impact of rainfall using deficient rainfall impact parameter (DRIP) which was developed in 2002. DRIP is based on the premise that both the availability of irrigation and the level of precipitation affect crop production.
DRIP scores based on data till July 22 showed that the overall rainfall in June 2009, the first month of the monsoon season, was 46% below normal. In terms of deviation from the long period average, it is the lowest since 1926. After June, the monsoon gained momentum and by July 22, the shortfall in rain fall from normal was reduced to 19%.
The improvement in monsoon performance not withstanding, some states are still severely impacted. States like Haryana, Bihar, Uttar Pradesh, Himachal Pradesh, Punjab, and Assam have recorded maximum deficiency.
Among states, Bihar (31 score), and Uttar Pradesh (26.3 score) are most adversely affected due to low irrigation coverage in these states.
West Bengal (17.6) Andhra Pradesh (17) Haryana (12.7) and Maharashtra (10.2) are also impacted by deficient rainfall. For 6 out of 13 states DRIP score for 2009 is highest during last six years.
The DRIP score for Punjab is low at 1.2 despite scanty rainfall as over 95% area is irrigated.