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October 1, 2009

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Drought threatens Indian economy

INDIA is facing its worst drought in nearly 40 years because of a once-in-a-generation shortfall in summer rains, a meteorologist said yesterday, a shortage that threatens to stall the country's recovery from the global economic downturn.

Rainfall during the monsoon season was 23 percent below average, with the northwest states of Punjab and Haryana, the main producers of wheat and rice, getting 36 percent less rainfall than usual, said Avadesh Kumar, a director at the Indian Meteorological Department.

"Going by the statistics available so far, India's 2009 monsoon rainfall has been the worst since 1972," Kumar said. India's four-month monsoon season ended yesterday.

Drought has been declared in at least 44 percent of India's districts, media reports said.

Economists worry the drought will hit the greater economy over the next half year, as declining harvests reduce demand for transportation and storage, affect exports and domestic trade, and reduce incomes for hundreds of millions of farmers.

In some areas there was not enough rain for rice to be sown, and poor rainfall where it was sown made the crops fail, Kumar said.

The situation would have been worse without a spate of late showers in the past four weeks, he said.

Last year, India's economy expanded by an annual rate of 7.8 percent during the April-June quarter. Growth for the fiscal year ending March 31 skidded to 6.7 percent, its worst since 2003, according to the government's Central Statistical Organization. From 2003-08, India's economic growth averaged 8.8 percent a year.


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