* Monsoon turns surplus to normal in past week
* Summer crops on a healthy growth track
* Haryana declares drought, Kashmir faces floods (Recasts, adds details)
By Ratnajyoti Dutta
NEW DELHI, Sept 4 (Reuters) - India's monsoon will be active next week, with the four-month long season showing no signs of retreating, weather officials forecast on Thursday, promising more rains over crop-producing regions.
A late finish will improve the growth prospects for most summer crops such as rice, sugarcane, soybean and cotton in one of the world's leading producers of farm commodities.
India's monsoon usually displays signs of a retreat in early September from western regions.
But rains revived in the past week, including over the grain bowl in the Northwest, the soybean belt and cotton areas after a three-week lull, the weather office said.
Rainfall for the week ended on Sept. 3 was 24 percent above the normal level for this time of year, a reversal from the previous week, which was 22 percent below normal.
The annual monsoon rains are vital because over half of India's farmlands lack irrigation, and the farm sector accounts for 14 percent of the national economy.
"Most of the summer crops are in vegetative growth stage, and free from any major pest or insect attacks," J.S. Sandhu, the country's farm commissioner, said.
Monsoon rain in India is the leading determinant of rural spending on consumer goods ranging from lipstick to cars as two-thirds of its 1.2 billion people live in villages. Its failure pushes up food prices.
An erratic monsoon last month featured long dry spells in some states in the grain bowl and floods in other areas in northern and eastern regions.
Heavy rain in Kashmir inundated many villages of the northern state, killing 65 people in the Indian-administered part, including a wedding party on a bus that was swept away, officials said.
Home Minister Rajnath Singh has cancelled his visit to the border state from Friday due to the incessant rain.
On Wednesday, Haryana became the first province of the monsoon season to declare drought.
India's farm minister, Radha Mohan Singh, said any states could use the federal government's drought-relief schemes including subsidies on diesel to power the pumping of water to parched fields.
But demands for drought relief from the federal budget will qualify only after an evaluation of the ground situation by a team of farm experts, he added.
A delay in the monsoon's retreat could narrow the shortfall in this season's rainfall and aid the growth process of the summer crops, which were sown late due to the poor rains.
"The monsoon will be in an active phase until early next week," D.S. Pai, the lead forecaster of the Indian weather office, told Reuters.
A delayed retreat will also aid the sowing of winter crops such as wheat and rapeseed, which are mainly planted in irrigated areas where late summer rains would improve reservoir levels.
Rains this season were 43 percent below the normal level in June, 10 percent below normal in the key planting month of July and again 10 percent below in August.
Additional reporting by Mayank Bhardwaj in NEW DELHI; Fayaz Bukhari in SRINAGAR; editing by Jane Baird