Monsoon’S Impact on Indian Economy [ Current Affairs - Economics ]
Monsoons play a very essential role in Indian economy. Indian economy is based on Industrial sector and agriculture. A good monsoon is favourable for farmers while poor and insufficient rain fall cause the crop failure. 70% of the people are directly related with farming.
- The land requires sufficient rainfall in each season to sustain agriculture.
- South West monsoon season generally start in early June and continues until September. In this period country receive major share of rain. North East monsoon arrives in December.
- India’s rural economy is highly dependent on the monsoons and good monsoon increases the overall GDP growth.
- Monsoon also affected agriculture related goods and services, consumer durables and textiles.
- Good monsoon is not just beneficial for the rural India. It’s also impact on overall economy.
- It’s Impact on Industries like: Automobiles, fertilizers, food processing, agro machinery and tools, financial services including insurance etc.
- In financial year 16-17, the growth of the banking sector get increase is expected to grow by around 12-13%.
- This help to increase the overall GDP growth rate for financial year 16-17.
- Rainfall below 90 percent of the average is considered a deficiency.
- Average or normal monsoon between 96 and 104 percent of a 50-year average.
- Rainfall of more than 110 percent of the average would mean an extreme monsoon.
Impact on monsoon:
- The impact of monsoon on some factors like crops, market, irrigation, economy, power sector, various industrial sectors etc.
- The monsoon start in June and the key areas are in the east and south. Various crops are heavily depending on rains for irrigation.
- The other crops like corn, lentils, cotton and oilseeds are important crop in western and central India. These crops are depends on seasonal rains.
Economy and Markets:
- Farm sector play a very effective role in the growth of economy. India is the world’s second biggest producer of some crops like: rice, sugar, wheat and cotton.
- This all crops are depends on monsoon season. So, monsoon season are very essential for farm output and economic growth of India.
- Higher farm output helps the government to take steps to cut the fiscal deficit and farm subsidies.
- Rain also impact on demand of gold in India.
- Rainfall cut demand for subsidised diesel, which is used to pump water from bores for irrigation.
- Higher rainfall allowing superior irrigation and more hydropower output.
Current status of Monsoons:
- South-West monsoon is progressing well and rain seems to be on target so far. Nation can look forward to a better FY16-17.
- Published on: August 11, 2016