Effect of Monsoon on Indian economy

Monsoon rainfall plays an important role in the economic development of India. In this article, I have described about the effect of good and bad monsoon on Indian economy. Also, know about the reasons for less rainfall in India. And how can Indian people overcome the effect of less rainfall or poor monsoon.


Monsoon plays an essential role in economy of a country. In the countries like India, where agriculture is the greatest source of economy, monsoon season plays a pivotal role. In India, directly or indirectly, 70% of employment is dependent on agricultural sector. This is one the major reason for dependence on monsoon season for the economic growth of India.

Monsoon in India

In India, the monsoon hits the southern shore in the month of June and lasts till September. The month of July is said to be the wettest month of the monsoon. If the monsoon is good, the economy of the India gets a boost which sequentially helps in maintaining the GDP growth chart. But, a little delay in monsoon may prove to be disaster for the Indian government as it becomes difficult to maintain the GDP growth.

Monsoon in India in the year 2012

Usually southwest monsoon hits the southern states i.e Kerala in the mid of June month. But, this year, the country is experiencing the delay in the monsoon. The monsoon touched India in the first week of July. In Maharashtra, the monsoon came on 5th July and reached the northern states till 8th July. The monsoon is getting slower and scanty rainfall can be experienced this year in major part of the country.

Reason for less rainfall in India in 2012

The month of July is coming to end, but till now, India has not seen any signs of good rainfall. The less rainfall in the country may create drought like situation. In India, the winter 2011 was longer and colder. Similarly, the summer was usually less hotter than usual. The reason for all this seasonal variation is the El Nino effect of the Pacific ocean which lasted for about four months.

Impact of good monsoon in India

  1. Increased output of grains and oil seeds :
    A good rainfall tends to increase the productivity of rice, sugarcane, millet, oil seeds and cotton. This encourages the government to ease the edges on the export of wheat and rice.

  2. Better irrigation :
    A good rainfall increases the ground water level and replenishes the reservoirs. This helps in good irrigation system and better hydroelectricity power output.

  3. Reduction in inflation :
    The good monsoon in the country also increases the production of vegetables and fruits. This reduces the price and thus calms down the inflation.

Impact of less rainfall in India

  1. Price of agricultural products rises :
    Since there is deficit in the rainfall this year, the production of crops, vegetables and fruits is highly affected. Due to shortage of rainfall, sowing of groundnut, paddy fields, soya beans, and kharif crops in the different states have been affected. Productivity of rice, oil seeds, sugarcane is also being affected. The agricultural sector is undergoing a bad experience. Since, the farmers are dependent on the monsoon; they are not able to do anything except to wait for the monsoon. The shortage of supply and huge demand of the agricultural products has increased the price.

  2. Shortage of power supply :
    Rise in temperature has resulted in shortage of power supply in many states of India. The power cut is also one of the main reasons for shortage of products. And this finally results in the hike in the price of agricultural products.

  3. Shortage of water supply : In states like Maharashtra, where the water supply of whole year is dependent on the monsoon rainfall, people experience the shortage of water supply. In Mumbai, the rainwater is collected in the huge tanks which is processed and supplied across the city around the year.

  4. Inflation :
    Less rainfall will result in less production. This will create drought like situation. Though India is self-sufficient for production of agricultural needs, but, if such situation occurs, then, India will be pushed into global market. This will result in inflation.

How to cope up with bad monsoon rainfall

  1. Install rainwater harvesting units in your building.

  2. Save water and do not misuse the water.

  3. Dig the ponds and well to store rain water.

  4. Plant as many as trees in you nearby locality. Encourage others to plant the trees.


Indian economy is highly dependent on the agricultural sector. The needs of the agricultural sector are mostly met from the rural area whose purchasing power is greatly affected by the poor monsoon. If the condition remains same, then agricultural sector is going to experience very bad situation which will directly affect the Indian economy. Therefore, Indian government must initiate some actions to improvise the infrastructure of agricultural sector in order to make the Indian economy independent of monsoon rains.

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