Monsoon’S Impact on Indian Economy (Download PDF)

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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.

Monsoon and the Indian Economy
  • 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.

Irrigation, Power:

  • 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/Last Modified on: August 11, 2016


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