"Our financial year 2016 GDP growth estimate of 8.1 per cent could also see a downside risk given the fact that CSO's fiscal year 2015 growth may be lower-than expected and agricultural growth of 3.6 per cent could be at risk in the event of deficient rainfall."
Below normal rains could hurt agricultural output and pose downside risks for the country's economic growth estimates, according to experts.
Citigroup in a research note said: "The recent spell of unseasonal rains which has impacted more than 10 per cent of standing Rabi crops has introduced a downside risk to Central Statistics Office's (CSO) financial year 2015 GDP estimate of 7.4 per cent."
It further said, "Our financial year 2016 GDP growth estimate of 8.1 per cent could also see a downside risk given the fact that CSO's fiscal year 2015 growth may be lower-than expected and agricultural growth of 3.6 per cent could be at risk in the event of deficient rainfall."
On prices, the report said while rains are a "threat", pro-active government policies such as contained Minimum Support Price (MSP) and food stock management could mitigate some of the inflation risks.
According to Japanese brokerage firm Nomura, "below normal rains could hurt agricultural output and depress rural incomes."
The country is likely to witness a "below normal" monsoon this season, for the second consecutive year, the Indian Meteorological Department predicted on Wednesday as it partly blamed the El Nino phenomenon for the low forecast.
Monsoon rains are crucial for agriculture as only 40 per cent of the cultivable area is under irrigation. The farm sector contributes about only 15 per cent to the country's Gross Domestic Product (GDP), but it employs about 60 per cent of India's population.
South-west monsoon spans from June to September.
El Nino is associated with a band of warm ocean water that develops in the central and east-central equatorial Pacific including off the Pacific coast of South America. It affects the weather patterns and also the rainfall.
This is be the second consecutive year that India may witness less rainfall. Last year, the country as a whole witnessed 88 per cent, which below deficit as per IMD's parameters.
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