The death toll from the worst monsoon floods to hit South Asia in decades passed 2,000 Thursday even as torrents of muddy water receded from millions of acres of farmland and rains shifted west.

Thousands of villages remained under water and threatened by disease, while millions were still displaced, mainly in India and Bangladesh, where the severe floods also destroyed valuable crops.

The Indian government is in the process of releasing money budgeted for "calamity" relief from a disaster fund of 800 million dollars, a Press Trust of India news agency report said Thursday.

The cost of the monsoon to India so far stands at about 320 million dollars since June 1 though the figures are expected to rise.

Bihar, where 1.1 million hectares (2.7 million acres) of farmland have been inundated and 14 million people affected, will be getting 37 million dollars in the coming days, PTI said.

Rains appeared to be returning to western states, which were hit hard in early July, and heavy downpours in Gujarat since Monday have killed nine people, a state disaster management official there told AFP Thursday.

"In two districts shifting operations are going on to take people out," said Aval Kumar Baria.

The coastal district of Jamnagar reported 269 millimetres (10 inches) of rain, Baria said.

India's home ministry disaster management division reported 1,521 deaths across the country from this year's monsoon up to Wednesday afternoon alone.

The figures do not include scores of people still missing from numerous boating accidents, including one in Bihar which police said killed 65 people on Monday night.

Health fears remained high and a UNICEF emergency officer told AFP the agency was working with state officials to conduct medical surveillance and inoculate children against diseases, particularly measles.

In Bangladesh the toll has reached 346 after at least 18 more deaths were reported, said Shafiqul Islam, spokesman for the food and disaster management ministry.

Kathmandu has seen 95 fatalities since the monsoon started, with 330,000 people displaced.

The monsoon floods are part of what the World Meteorological Organisation said Tuesday was a global pattern of record extreme weather conditions since the start of the year.

As well as these floods, the UN weather agency's extreme weather list also includes a summer heatwave in Europe, heavy rain that ravaged part of southern China and the first documented tropical cyclone in the Arabian Sea.

The devastation in India threatens an entire season's crops in some areas, raising fears of food shortages.

The floods caused total or partial destruction of close to 75,000 homes in Bihar, where road and bridge repairs were expected to cost some 40 million dollars, a state relief coordinator said.

Another 1.4 million hectares of farmland were flooded in northern Uttar Pradesh and in northeastern Assam.

In neighbouring Bangladesh, which saw 40 percent of its land inundated in the annual flooding, one scientist said the rice-growing nation might see its GDP growth rate hit.

Crops on 1.6 million acres of farmland have been completely or partially damaged, officials say.

"There is dim hope that this crop, worth hundreds of millions of dollars, could be recovered," said Hamid Mia, a scientist working in Bangladesh for the Manila-based International Rice Research Institute (IRRI).

The Dhaka government has urged its citizens and foreign donors to help feed nine million displaced people while aid agencies and governments say millions of dollars more are needed across South Asia for food and medicine.

Officials are calling for money to be spent on flood preparedness but one Indian village in the impoverished state of Bihar provided a cautionary tale of the dangers of haphazard measures.

The 1,400 villagers of Bairabh, in the north of the state, say they have been living under a foot of water for a decade, due to poor drainage caused by an anti-flood embankment built by neighbouring villages.

"We have been campaigning for almost a decade for the authorities to drain this village of the stagnant water," said local leader Navneet Thakur.