ET in the classroom: How monsoon affects Indian economy

India faces the prospects of a second drought in 4 years, though it is too early in the season to worry. ET takes a look at the role monsoon plays in the Indian economy.

Is Farm Sector Crucial For Economy?

Statistically, its significance has declined as now farm sector has a much lower share in GDP. However, with over 50% of population still finding its livelihood in the sector, any stress in the sector has a disproportionately large impact on people

How Important Is Monsoon For Agriculture?

Since India gets most of its water from the 3 months of rains, the importance of monsoons cannot be understated. However, increase in irrigation facilities has helped reduce risks

How Monsoon Affects Farm Output?

Only in extreme drought years does the output drop sharply. The rising importance of winter crop and better irrigation has improved India's ability to withstand monsoon shortfall

Is Monsoon Linked To Inflation?

A poor monsoon can create shortage. But in recent years, food inflation has been high despite rains due to shift in demand patterns. A good buffer stock has also weakened the linkage