Effect of Monsoon on Indian economy


  • According to Indian Metro logical Department (IMD), India will receive normal rains during the June-to-September southwest monsoon season.
  • The average rainfall over the past 50 years, or the LPA, is 89cm. IMD’s forecast of 96% rainfall comes with a model error of 5%. It is considered to be above normal when it is between 105% and 110% of the LPA
  • The forecast has a margin error of 4%. The monsoon is considered normal if rains in the June-September season are between 96% and 104% of a 50-year average of 89 cm.

Importance of Monsoon to India.

  • About 800 million people live in villages and depend on agriculture, which accounts for about 15% of India’s gross domestic product (GDP).
  • The monsoon is the important for India’s farm-dependent $2 trillion economy, as at least half the farmlands are rain-fed. The country gets about 70% of annual rainfall in the June-September monsoon season, making it crucial for an estimated 263 million farmers.

If the monsoon fails or is below average it adversely effects the economy of country as our country is agriculture based economy.

  • Due to lack of proper rainfall farmers cannot fulfill the demand of consumers.

Last year’s report

  • India received normal rainfall last year after two back-to-back poor monsoons in 2014 and 2015 that affected the overall growth in the country.
  • The second consecutive year of normal monsoon will help revive consumption demand which was severely affected by demonetization.

Consequences of poor rainfall

  • Planting of kharif crops starts in month of June.
  • Summer crops fulfill half of the demand of crops for a year.
  • A delayed monsoon or poor monsoon will have adverse effect on crop growth.
  • demand supply chain will not move in ideal condition.
  • A poor monsoon not only leads to weak demand for fast-moving consumer goods, two-wheelers, tractors and rural housing sectors but also increases the imports of essential food staples and forces the government to take measures like farm loan waivers, thereby putting pressure on finances.
  • Poor monsoon can also lead to drought, means no plants can be grown that year.
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1 Comment
  1. Reply
    June 13, 2017 at 9:10 pm

    Awesome composition

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