Above-Normal Monsoon To Boost Farm Output And Ease Inflation: Crisil Report

A Crisil report released on Wednesday said the India Meteorological Department’s (IMD) forecast of an above-normal monsoon will likely boost farm production, drive rural demand, and help control inflation.

The IMD has predicted 106 per cent of the long-period average rainfall during the southwest monsoon (June to September).

If the forecast holds, this will be the second straight year of above-normal monsoon. Crisil said this could lead to strong farm output, higher rural consumption, and stable food prices.

Agriculture and allied sectors saw 4.6 per cent GVA growth in fiscal 2025. This exceeded the 4.0 per cent average seen from fiscal 2015 to 2024.

Food supply remained healthy, which pushed down consumer price inflation (CPI) in the March quarter. CPI inflation dropped further to 3.2 per cent in April.

Crisil expects this trend to continue if the rains follow the forecast.

Rainfall spread across time and regions is vital for balanced farm growth. The IMD said June may receive over 108 per cent of the long-period average rainfall.

The past three monsoon seasons had weak June rains. A strong start to the season could aid sowing and refill water bodies.

Region-Wise Forecast & Climate Risks

The IMD expects Central and South Peninsular India to get above-normal rains. Northwest India may see normal rainfall. Only Northeast India may receive below-normal rainfall.

Crisil warned of climate risks. These include excess or poor rainfall, heatwaves, floods, and cyclones.

In fiscal 2025, rains helped foodgrain output and kept inflation low. But vegetable crops suffered due to erratic weather.

About 41 per cent of food inflation came from rising vegetable prices caused by heatwaves and heavy rains, the report noted.

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