Monsoon picks up; govt says no need to panic

New Delhi: India has a contingency plan if annual monsoon rains remain below normal and there is no need panic, the Finance Minister said on Wednesday.

India has suffered the worst start to the vital monsoon in eight decades, raising fears of a drought in a country where only 40 per cent of farmland is irrigated.

But the rains have picked up from a shortfall of 34 per cent of the long-term average in the June 1-July 9 period, to 29 per cent between June 1 and July 14, weather officials told Reuters.

The weather office on Wednesday forecast rains in key cotton, rice and soy regions, including widespread precipitation in the next 48 hours in central India, boosting the soybean crop.

"There has been some concern on the progress of the monsoon. As I mentioned earlier, the government is monitoring the situation," Finance Minister Pranab Mukherjee told Parliament.

India was ready to implement a contingency plan, he said, but did not elaborate.

"At the same time I would not like to press the panic button," he added.

Flash floods triggered by heavy monsoon rains have killed 15 people in Orissa, but in Assam and Manipur authorities have declared droughts after scant rain.

Power supplies

The Meteorological Department has also forecast patchy rain in Punjab and Haryana where deficient monsoons have encouraged rice farmers to switch to premium grades, which require less water but are more prone to disease.

A 30 per cent rainfall deficit in Assam, a tea- and rice-producing state, led to extensive crop damage and industry officials said tea prices had soared.

"An action plan has been worked out to provide water to the people in the affected area, so that there should not be any shortage of drinking water," said Tarun Gogoi, Assam's Chief Minister.

Weak rains forced the government to divert power supplies to the countryside to irrigate rice and oilseed crops and limit damage, a move which threatens to worsen the summer power deficit that has plagued India for decades.

Though the farm minister said on Monday he expected the monsoon rains to improve, jitters prompted New Delhi to stop wheat exports 10 days after it lifted a two-year ban on shipments.

Trade Minister Anand Sharma on Wednesday told Parliament the government would not raise import taxes on palm oils, to keep prices down. There is worry the monsoon could harm the oilseed crop and send prices up.

Edible oil producers want a higher tax to curb surging imports.

In flood-prone Orissa the government told local authorities to stock food and put rescue teams on standby as heavy rain stranded thousands, with more downpours were expected.