As India recovers from the worst monsoon seen in years, and the El Niño continues to intensify, more than half of the country’s geographical area is now facing drought-like conditions. This is bringing deep distress in the rural economy as farm incomes and food prices are under threat.

On the other hand, the rural employment programme meant to cushion such shocks is providing fewer jobs.

The India Drought Monitor of IIT Gandhinagar said on September 23 that 51.2% of India’s geographical area was “abnormally dry or worse (moderate to exceptional drought)” — up from 46% on September 2. The worst-affected regions were the West, at 82%, followed by the Northeast at 64%, the South at 56% and the North at 46%.

The drought has already spread across some of India’s biggest agricultural states. Maharashtra has declared 265 of 358 tehsils drought-hit.

Karnataka has identified 177 of 240 taluks, or 73.8%, with the state government warning the number could rise beyond 200. Andhra Pradesh has identified 388 of 688 mandals across 21 districts as moderately or severely hit. Rajasthan has identified 117 of 425 tehsils.

This has created a risk for rural India greater than the headline rainfall deficit alone suggests. Crops can be sown and still fail after prolonged dry spells, while depleted soil moisture and reservoirs leave less of a buffer for the months ahead.

And unlike during previous El Niño-linked droughts, the rural income cushion is already under pressure.

India's rural economy is facing a three-way hit of damaged crops, fewer safety-net jobs and rising prices, with another uncertain harvest ahead.

Drought Tests India’s Rural Cushion

The rainfall numbers don’t tell the whole story.

Between June 1 and September 28, Punjab recorded a 42% rainfall deficit, Bihar 31%, Karnataka 30%, Kerala 27%, Haryana 25%, Andhra Pradesh 24%, Rajasthan 22%, Tamil Nadu 20%, Maharashtra 19% and Telangana 17%. The national deficit was 12%.

The rain deficit is, however, not an accurate measure of drought. Punjab and Haryana, for example, had higher rain deficits but extensive irrigation ensured no crop loss. There, farmers are facing delayed procurement, sparking fears of distress sale.

Kharif sowing data is similarly misleading. The Agriculture Ministry’s Unified Portal for Agricultural Statistics shows sowing was down just 1.21% from last year. But sowing figures do not capture crops that subsequently wilt after prolonged dry spells or erratic rainfall.

What should worry farmers more is inadequate soil moisture and groundwater reserves.

The Mahalanobis National Crop Forecast Centre said on September 17 that soil moisture was below the 10-year average in parts of Karnataka, Maharashtra, Andhra Pradesh, Telangana, Tamil Nadu, Rajasthan, Gujarat, western Madhya Pradesh and northern Bihar.

The Central Water Commission’s September 24 report showed water storage at 70.8%, 11.5% below the 10-year average. Eastern and northern regions were particularly weak, with live storage at 50% and 62.7%, respectively.

The pattern is uneven. Scanty, delayed or erratic rain and prolonged dry spells have hit some regions, while excess rain, floods and landslides have affected others. Union Agriculture Minister Shivraj Singh Chouhan has declared drought in five states, including Telangana and Rajasthan, while extreme rain and floods have affected 6.11 lakh hectares of cropland.

The full extent of crop losses will become clearer once states complete their assessments.

Weaker Cushioning

Previous droughts saw the rural job programme scaled up as farm incomes came under pressure. In 2009, when a strong El Niño produced a drought affecting 52% of India’s geographical area, MGNREGS was expanded to provide an income back-up. In 2015, higher allocations and days of work under MGNREGS reached a five-year peak.

This time, the employment cushion is moving in the opposite direction.

The MGNREGS has been replaced by the VB-G RAM G since July 1. During July-September, just 284 million person-days were created, down from 418 million in the same period last year — a 32% drop.

Average days of work provided to households have also fallen sharply, from 43.2 days in FY26 to 17 days in FY27 through September.

Ground Reality

If the Reserve Bank of India’s latest report is to be believed, the Indian economy is “decoupled” from monsoon shocks because incomes are becoming less dependent on monsoons.

On the ground, the reality seems to be different.

Sajal Kulkarni, director of the Centre for People's Collective for Revitalizing Rainfed Agriculture Network, said Maharashtra’s Marathwada and Vidarbha regions face 70-80% crop loss, with overall loss of around 60% across the state. These regions have recorded rainfall deficits of 38% and 27%, respectively.

“Farmers are selling goats and sheep in distress as they have run out of cash and the VB-G RAM G work is erratic”, Kulkarni told The Core.

Maharashtra had already announced a Rs 36,585 crore loan waiver in July, raising the loan limit from Rs 50,000 to RS 2 lakh. The measure will benefit 56 lakh farmers.

Karnataka is facing a similar squeeze. Revenue Minister G Paramenshwar has claimed 82% crop loss. South Interior Karnataka has recorded a 46% rainfall deficit, North Interior Karnataka 44% and Malnad 38%.

TN Prakash, former chairman of the Karnataka Agricultural Prices Commission (KAPC), said maize, toor, green and black grams and cereals such as bajra and ragi have suffered the most damage.

“Total crop loss is anticipated to be Rs 25,000-30,000 crore. The state is expecting central assistance to restructure farmers’ loans for relief.”

In Andhra Pradesh, the worst-hit areas are Rayalaseema, where in many areas 90-95% land remains fallow due to low rainfall, and the northern coastal belt with low irrigation facilities that are meant exclusively for horticulture. Paddy and groundnut have been damaged.

Telangana has asked the Centre to declare 235 of 621 mandals, or 38%, drought-hit, with some estimates putting crop losses at 30-40%.

In Rajasthan, Officer on Special Duty SD SR Meena of the Disaster Management, Relief and Civil Defence Department told The Core that 117 of 425 tehsils (27.5%) have been identified as drought-hit, based on rainfall data, and an official announcement will follow the crop-loss survey.

Rajasthan farmer leader Gurpreet Sangha said major damage has been caused to soybean, maize, bajra, moong and urad crops, causing a crop loss of 20-40%. Erratic rainfall hit the eastern (Dungarpur, Banswara) and southern (Kota, Barana) parts, while the western part (Jaisalmer and Barmer) remained parched.

Rural Inflation On The Rise

The damage is not confined to farm incomes. The rural economy also must contend with rising inflation along with crop loss.

Rural inflation rose from 4.84% in July to 5.23% in August, while rural food inflation rose from 5.79% to 6.13%. Both were higher than urban inflation, where general inflation was 4.31%, and food inflation was 5.6% in August.

September data are still awaited, but milk, sugar and onion prices remain elevated, while multiple industry reports suggest FMCG prices could rise because of higher semiconductor chip prices.

That combination — weaker farm output, fewer rural jobs and higher food prices — makes this more than a rainfall problem.

Rabi At Risk

The concern is also moving beyond the kharif harvest.

The World Meteorological Organisation warned on September 3 that El Niño was set to be “very strong”, raising the risk of extreme weather into 2027. That could mean more erratic rain, depleted reservoirs in some areas and floods in others, eventually hurting rabi crops.

A group of 188 Indian ecologists, conservationists and researchers has warned about an impending “super El Niño”, saying climate change has made extreme weather events more intense and reduced the gap between them.

The Ministry of Earth Sciences recently said India has “a stronger inverse relationship” between El Niño and rainfall during the latter half of the monsoon season, particularly in September. Of 16 El Niño years since 1950, only seven experienced below-normal rainfall.

But uncertainty itself is becoming an economic problem.

States are responding with familiar relief measures. Maharashtra plans to waive land revenue, stop loan recovery, and relax VB-G RAM G norms. Karnataka has announced an input subsidy of Rs 2,500 for 40-50 lakh farmers and is considering a loan waiver. Rajasthan plans to add 25 days of VB-G RAM G work, focusing on water recharge and storage.

Those measures may provide temporary relief. They do not address the longer-term vulnerability exposed by this year’s drought.

India’s drought manual of 2016 remains unchanged in 2026, focusing on much the same post-drought response now being rolled out by states.

If climate-related unpredictability and uncertainty are becoming the new normal, agriculture will need to adjust before the next drought rather than after it. This has to be done through changes in cropping patterns, drought-resilient seeds, and new technologies.

That will require more investment in R&D and national-level plans and strategies.

The immediate problem is no longer simply how much rain India gets. More than half its geographical area is already experiencing drought-like conditions, rural employment is falling, and food inflation is rising.

The bigger question is whether India’s farmers have enough resilience — and enough income support — when the rain does not arrive as expected.