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Does Rain affect Indian Economy?


Rainfall or monsoon plays apivotal role in defining the economy of a country. In a country like India, that is largely dependent upon agriculture. About 70 percent of employment is contributed by agriculture.  About 18 percent of Gross Domestic Product (GDP) is contributed by agriculture. In India, the season of rainfall commences from June and lasts till September. 60 percent of the total sown area is affected by rainfall and is susceptible to either drought or floods.


Indian economy is directly influenced by monsoon.


Good monsoon boosts economy and vice versa.


Most of the summer rains are due to southwest monsoon. The monsoon is the main cause of famines and floods. Excessive rains lead to floods while scanty rain ca uses drought.  Besides amount of rainfall the natural calamities are also determined by other crucial factors such as deforestation, soil erosion, nature of soil, hydrology, etc.


Due to extensive industrialization and an apathetic attitude towards nature and its resources, the country is facing a drought-like condition. The farmers are becoming indebted to moneylenders owing to the huge loans that they have taken.


According to the Indian Meteorological Department, in 2012 the rainfall will not have good monsoon. In June there was a deficit of 31 percent in the amount of rainfall received. Agricultural states like Haryana and Punjab have received scanty rainfall so far.  If te situation does not improve then the government will have to cut down on the export of rice and wheat. This may result in inflation and loss of foreign currency.





In North India, the rainfall has been delayed by 20 days and the Bhakra Nangal dam which is the largest in the country has reached a dangerous and alarming level.



Effects of Monsoon Rains:

Various crops are affected by amount of rainfall that a region receives. Rains affect the sowing of peanut in Rajasthan and Gujarat, soya-bean cultivation in Madhya Pradesh and Maharashtra and paddy in Uttar Pradesh.

Rice, sugarcane, cotton, oilseeds and millets are also directly affected by rainfall.  Rising price of sugar is also because of lack of proper and adequate rainfall this year. The meteorological departments has said that the amount of rains this year are 31 percent less than normal and this is adversely affecting the farming sector and ultimately the economy of the country.


The purchasing capacity of the rural population is also affected. India is largely dependent on domestic demands that come mainly from the rural population. “To reduce the dependency on monsoon, Indian government needs to take some action and provide improved infrastructure for the agricultural sector in the following budget and literate the farmers about the latest technologies and equipments to use, rather than depending on monsoon rains.”


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