Indian economy was often called the ‘monsoon economy’. It reflects the critical role of the monsoon in
Indian agricultural economy. Monsoon
plays an essential role in economy of a country. In the countries like India,
where agriculture is the greatest source of economy, monsoon season plays a
pivotal role. In India, directly or indirectly, 70% of employment is dependent
on agricultural sector. This is one the major reason for dependence on monsoon
season for the economic growth of India.
How important is Monsoon to us?
·
Agriculture contributes around 17% to GDP
·
India is the 2nd largest producer of rice and wheat in the world
·
3/5th of arable land dry and parched due to low penetration of
irrigation system leaves
·
Monsoon acts as a controller of prices of
primary articles such as food grains, etc.
·
It impacts industrial production with nearly 40% of the raw-material coming from the farm sector.
How monsoon affects
Indian economy?
· The monsoon rains are
vital for farm output and economic growth in India, the world's second-biggest
producer of rice, wheat, sugar and cotton. Farm sector shares for about 15% of
India's nearly $2 trillion economy, Asia's third biggest.
· India is largely
self-sufficient in major food grains such as rice and wheat, but drought can
send the country to global markets. In 2009, India had to import sugar, sending
global prices to record highs and pushing up inflation.
· Higher farm output
would rein in food prices and help the government to take steps to cut the
fiscal deficit and farm subsidies. India's food inflation rose to 10.66% in May
from 10.18% in April, latest figures show.
·
A stronger economic
outlook can lift sentiment in equity markets, mainly of companies selling
products in rural areas, including consumer goods and automobiles.
·
Monsoon rains impact
demand for gold in India, the world's top consumer of the metal, as purchases
get a boost when farming incomes rise amid high crop output.
· Monsoon rains
replenish reservoirs and lift ground-water levels, allowing better irrigation
and more hydro power output.
·
Higher rainfall can
cut demand for subsidised diesel, which is used to pump water from wells for
irrigation and makes up for about 40% of India's oil products demand.
IMPACT OF LESS RAINFALL IN INDIA?
Price of agricultural products rises :
Since there is deficit in the rainfall
this year, the production of crops, vegetables and fruits is highly affected.
Due to shortage of rainfall, sowing of groundnut, paddy fields, soya beans, and
kharif crops in the different states have been affected. Productivity of rice,
oil seeds, sugarcane is also being affected. The agricultural sector is
undergoing a bad experience. Since, the farmers are dependent on the monsoon;
they are not able to do anything except to wait for the monsoon. The shortage
of supply and huge demand of the agricultural products has increased the price.
Shortage of power supply :
Rise in temperature has resulted in shortage of power supply in many states of
India. The power cut is also one of the main reasons for shortage of products.
And this finally results in the hike in the price of agricultural products.
Shortage of water supply : In states like Maharashtra, where the water supply of whole
year is dependent on the monsoon rainfall, people experience the shortage of
water supply. In Mumbai, the rainwater is collected in the huge tanks which is
processed and supplied across the city around the year.
Inflation :
Less rainfall will result in less production. This will create drought like
situation. Though India is self-sufficient for production of agricultural
needs, but, if such situation occurs, then, India will be pushed into global
market. This will result in inflation.
Conclusion:
Indian economy is highly dependent on the agricultural sector.
The needs of the agricultural sector are mostly met from the rural area whose
purchasing power is greatly affected by the poor monsoon. If the condition
remains same, then agricultural sector is going to experience very bad
situation which will directly affect the Indian economy. Therefore, Indian
government must initiate some actions to improvise the infrastructure of
agricultural sector in order to make the Indian economy independent of monsoon
rains.
Indian economy is highly dependent on the agricultural sector. The needs of the agricultural sector are mostly met from the rural area whose purchasing power is greatly affected by the poor monsoon. If the condition remains same, then agricultural sector is going to experience very bad situation which will directly affect the Indian economy. Therefore, Indian government must initiate some actions to improvise the infrastructure of agricultural sector in order to make the Indian economy independent of monsoon rains.
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