With advancement of remote sensing techniques, remote-sensing drought indices have been widely used for drought monitoring. However, the monitoring accuracy of a specific drought index regionally varies. Considering the deficiency of existing drought indices in reflecting vegetation growth, here we propose a Modified Drought Severity Index (MDSI) with local optimization method constrained by the inclusion of vegetation greenness, crop water shortage, canopy temperature, vegetation structure, and physiological status. We evaluated drought monitoring performance of MDSI across China, and detected high correlations between MDSI and soil moisture (SM), Standardized Precipitation Index at a 3-month scale (SPI-3), actual drought-affected areas (ADA), evidencing higher drought performance of MDSI when compared to 8 widely-used drought indices. Besides, MDSI performed better in monitoring agricultural drought. We found amplifying short-term drought intensity in the future. Ecological restoration and cultivated land reclamation can alleviate drought effects. However, urbanization can potentially intensify droughts. How to adapt human behavior to droughts is a challenging task.