Monsoon picks up; govt says no need to panic

By Mayank Bhardwaj and Rajesh Kumar Singh

NEW DELHI (Reuters) - India has a contingency plan if annual monsoon rains remain below normal and there is no need panic, the finance minister said on Wednesday.

India has suffered the worst start to the vital monsoon in eight decades, raising fears of a drought in a country where only 40 percent of farmland is irrigated.

But the rains have picked up from a shortfall of 34 percent of the long-term average in the June 1-July 9 period, to 29 percent between June 1 and July 14, weather officials told Reuters.

The weather office on Wednesday forecast rains in key cotton, rice and soy regions, including widespread precipitation in the next 48 hours in central India, boosting the soybean crop.

"There has been some concern on the progress of the monsoon. As I mentioned earlier, the government is monitoring the situation," Finance Minister Pranab Mukherjee told parliament.

India was ready to implement a contingency plan, he said, but did not elaborate.

"At the same time I would not like to press the panic button," he added.

Flash floods triggered by heavy monsoon rains have killed 15 people in Orissa, but in Assam and Manipur authorities have declared droughts after scant rain.