Both precipitation and potential evapotranspiration are used for irrigation scheduling . The ratio of the two is considered as aridity or drought in index. Here is an interesting PDF ..
Meteorological Drought monitoring is mainly based on the analysis of available water for crop, animal humans.... In reality, this water is the difference between precipitation ( input) and actual evapotranspiration ( output). Since actual evapotranspiration is difficult to calculate at large scale, it is more appropriate to use potential evapotranspiration (ETP) that depends only on climate conditions.
When needed data to compute ETP are not available, the FAO apoted a more simplified drought index SPI, calculated only from precipitation data.