New Delhi, September 9: With inadequate rains affecting crops, your weekly grocery bills are expected to be more than 7% costlier this year, as per estimates by ICRA. The GST rate cuts may not offer much respite, as economists say food inflation higher than 5.5% is ‘very much on the cards’ for the coming months, up to October this year.
With the rainfall remaining deficient to below 15% across key agricultural belts, this has disrupted the Kharif crop and constrained vegetable production. Weather agencies have projected El Niño conditions to remain strong until early 2027, affecting upcoming Rabi sowing cycles as well.
Earlier this month, Nomura warned that the deficient rains could result in food inflation, with a rollover effect on rural consumption also on the cards. The Consumer Price Index (CPI) already rose 5.52% in July, with food prices expected to drive inflation further by Q2 and Q3 of FY2027.
This year, India has received 13% less rainfall since the monsoon began on June 1. Besides a brief reprieve, rainfall was 35.4% below average in June, with the August monsoon running 15% below average.
In the past, India has experienced below-average rainfall during most El Niño years, which sometimes led to severe droughts that destroyed crops and forced authorities to limit exports of grains.
