RBI Monthly Bulletin: Monsoon shortfall could weigh on growth, inflation outlook

📌 Summary:

• The RBI's "State of the Economy" article (in its monthly bulletin) cautioned that an adverse southwest monsoon, if it materialises, could weigh on India's growth and inflation outlook
• Per IMD's updated forecast (released May 29, 2026), the southwest monsoon (SWM) rainfall is likely to be below normal this year; the SWM arrived over Kerala on June 4, three days late, and cumulative June 1–21 rainfall is significantly below normal
• Reservoir position has slipped below last year's level but remains above the decadal average
• Buffer cushion: thanks to last year's good harvest, public procurement of wheat has been robust; the Food Corporation of India (FCI) holds rice and wheat stocks well above buffer norms, a strategic cushion against any supply disruption or El Niño-triggered price spike
• The article carried the usual caveat that views are the authors' and do not represent the RBI's official view

🎯 UPSC Relevance: GS3 — monetary policy communication, monsoon-growth-inflation transmission, food management and buffer stocks as macro-stabilisers.

📝 Prelims Facts:

• RBI's "State of the Economy" is published in its monthly Bulletin
• IMD = India Meteorological Department; updated monsoon forecast released May 29, 2026
• FCI = Food Corporation of India; maintains rice/wheat stocks against buffer-stocking norms
• SWM normal onset over Kerala: June 1

🔑 Key Term: Buffer Stock — foodgrain reserves (rice, wheat) held by the FCI above prescribed norms to stabilise supply and prices and meet PDS/welfare needs.