Sugar remains a cyclical problem, now aggravated by drought, but output of pulses continues to stagnate, despite innumerable schemes, and larger imports are needed to meet domestic demand.

The drought also highlights the vulnerability of Indian agriculture to climate change. Despite pious intentions of several governments, irrigated areas have not expanded sufficiently, but for Punjab, Haryana and western Uttar Pradesh. The harsh consequence has been a crisis whenever the monsoon plays truant.

The current spell of drought has also cast a doubt over India's ability to rebound fast from the recession. Even Finance Minister Pranab Mukherjee has pared his growth forecast to six percent from 6.5 percent earlier.

The latest industrial output data, however, has been much more encouraging, though rural demand may not rise as much as anticipated this year. There is hope yet, as 'kharif' is the summer sowing season in India and the 'rabi' or winter crop is still to come.

The summer crops are mainly paddy, millet, pulses, maize, sugarcane and oilseeds, while the main rabi crops are wheat, barley and gram. Thus, even as there could be a fall in the output of rice, sugar, pulses and oilseeds, the production of wheat and barley may still be more than sufficient to meet the country's needs.

But that does not wish away the fact that the immediate situation remains critical due to the drought, hampering the prospect of a stimulus in demand over the next few months on account of the festival season between September and November.

Normally, the numerous festivals in the run up to Diwali provide an occasion of feasting and buying, much on the lines of the Christmas season in western countries. But such a buying spree is unlikely in rural areas given the dent on purchasing power due to the drought.

Both the prime minister and the finance minister have assured timely steps and said the country has the capability and the capacity to tackle any eventuality as the country did on the previous occasion in 1987. One can only hope these skills have improved so as to cause minimum pain to the common person.

(14.8.2009-Sushma Ramachandran is an economic and corporate analyst. She can be reached at sushma.ramachandran@gmail.com)