The cost of drought

Focus should go beyond immediate relief

Maharashtra has declared drought in 265 of its 358 talukas. The Marathwada and Vidarbha regions are particularly affected, with the soybean, cotton, tur, and maize crops hit by moisture stress. Maharashtra accounts for nearly 48 per cent of India’s soybean and 39 per cent of tur output. A significant crop loss could eat into farm incomes as well as push up the prices of pulses, edible oils, and livestock feed. Notably, the impact of a deficient monsoon is not limited to Maharashtra. India’s monsoon this year ended with 12.6 per cent below normal rainfall at 759.4 millimetres (mm) against the long-period average of 868.6 mm. It was the fourth-lowest monsoon rainfall since 2001 and the weakest since 2015. The deficit was accompanied by considerable regional variation, leaving reservoirs and soil moisture under stress. More than half the country was under dry or drought conditions by mid-September, with western and southern India affected the most. This is worrying particularly because the monsoon accounts for more than 70 per cent of India’s annual rainfall and replenishes the water reserves needed for agriculture, drinking water, and power generation.

 

Deficient rainfall has reduced the water levels in 178 reservoirs monitored by the Central Water Commission to almost 70 per cent of their capacity as of last week, below the 10-year average of 76.6 per cent. This weakens the buffer available for both irrigation and drinking water and complicates the outlook for the coming rabi season. According to an estimate by rating agency Icra, kharif acreage was 1.2 per cent lower, year-on-year, with most crops except pulses and coarse cereals contracting. It has consequently lowered its FY27 estimate of agricultural growth to about 1 per cent and warned of risks to rural demand and food inflation. It is worth noting that the consequences of a weak monsoon extend well beyond the farm sector. The drought has also had a spillover effect on the power sector, for instance. Hydropower generation was nearly 12 per cent below the projected requirement in the first half of FY27, resulting in greater reliance on coal. At the same time, coal stocks at power plants subsequently fell sharply, which added to supply pressures during evening hours.

 

The policy response must, therefore, be comprehensive. Reservoir water should be prioritised for drinking needs and critical irrigation. Crop advisories should encourage, where agronomically appropriate, shifts towards less water-intensive crops. Crop-loss assessment, soil-moisture monitoring, and weather advisories need to be strengthened. The rural-employment scheme, which was recently renamed the Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin), or VB-G RAM G, and guarantees 125 days of wage employment, will also be tested in terms of providing relief in the affected areas. Any meaningful relief, however, will carry a fiscal cost. Maharashtra’s drought-relief package is estimated at about ₹45,000 crore, which will add pressure to an already constrained state Budget. The Centre too needs to support drought-affected states. Compensation will be needed, particularly for farmers facing crop failure, but a substantial part of public spending should improve water-use efficiency and drought preparedness. This would help reduce both the economic damage from future rainfall shocks and the fiscal burden of repeated relief. States like Maharashtra need to move away from water-intensive crops like sugarcane.