An objective numerical drought index based on monthly monsoon rainfall and duration has been developed for assessment of drought intensity. The drought intensity equation serves the dual purpose of assessing the intensity of drought as well as flood. The Drought Area Index (DAI) is defined as the percentage area of India having a mean monsoon index ≤ −2 (i.e., moderate or higher drought severity). Likewise, the Flood Area Index (FAI) is the percentage area of India with mean monsoon index ≥ +2 (i.e., moderate or more severe wetness), where the mean monsoon index is the mean drought index for the four monsoon months. A year is defined as a large-scale drought or flood year when DAI or FAI ≥ 25. Using the evolved criteria, years of large-scale drought and flood over India have been identified during the period 1891–1975. The method adopted for defining large-scale drought or flood does bear out the actual experience. Power spectrum analysis reveals a weak triennial cycle in DAI series and a highly significant quasi-periodicity of 20 years in the FAI series—nearly a double sunspot cycle. The FAI series is in phase with the double sunspot cycle and large-scale floods have been more frequent in the high-amplitude maximum phase of sunspot cycle. Weaker meridional pressure gradients, larger northward seasonal shifts of the monsoon trough, larger numbers of days of breaks in the monsoon, smaller frequencies of depressions and shorter westward extents of depression tracks appear to be the major factors associated with large-scale droughts, opposite features have been observed for large-scale floods. The height of the 200 mb surface in May is found to be abnormally low in the latitude belt 15–30°N, along 70°E during large-scale drought years, in contrast to abnormally high levels during flood years. The 200 mb surface during May seems to have the potential for prediction of extreme abnormality in the following monsoon season.