Fy Shadow

Shadow of the drought on Indian economy: India can emerge?

India may not have been hit by the recession as well as Western countries, but it is bypassed with its own problems that pulls back the great renaissance of the Indian economy. Despite all the inefficiencies of the system, India experienced an overall growth of 7-8% in the last 2 years. This increase is primarily attributable to the development of investment in different sectors by the government. Amid the economic downturn, agriculture grew by only 1.2% versus 4.1% in 2008. As the country is to see the back of the recession and emerging industries from a slowdown in growth, overall growth of the economy was expected. However, without the monsoon season, and rising inflation, government officials have been left at the end of width. It seems a paradox full, however, that a nation is growing at a rate of 7-8% is not even an irrigation system that supports the sector in drought conditions and we are still dependent on rainfall majorly ensure an adequate food supply and proper functioning of other industries. Agriculture employs 60% of the population and its contribution to India's GDP is only 17% compared to the service industry, which employs only 10% of the population and contributes about 58% of GDP. Maybe we need a sustainable development in this sector to ensure economies of scale.

It is absurd that surprising when the government focuses on the development and strengthening the economic infrastructure of the nation and the pursuit of sectoral growth, it is a trivial reason to leave "no rain, an impact on all sectors in this period of slowdown. The negative effect of inadequate irrigation facilities has resulted in the decrease in rice production by 15%. Corn prices have crossed Rs 900/quintal for the 1st time, and urad daal tuar crossed Rs 6000 and Rs 4000 a quintal now. This sharp increase in food prices has increased grocery bill almost 1% in one month only. This increase in commodity prices will affect nearly all industries have witnessed a green shoot far and can also see a premature death soon.

Impact:

) Consumer A. (FMCG):

With consumers spending more on basic necessities such as food products, which could result in a lesser part of their portfolio goes to the purchase of consumer goods, which in turn could see a slowdown in demand once again. Thus, with rising food prices, the government may increase the rate of interest that may force companies to postpone investment projects. Thus, a sluggish demand, no investment could mean days to condemn the economy is reviving the recession.

  b) Textiles:

The export industry already hit is haunted by the delayed planting of cotton, which could increase the price of wire.

  c.) Stumbling Exchange:

With lower demand and sluggish investment growth, the stock market is also seeing a drop without rain and high inflation affecting the budget of the common man.

d) Manufacture:

Water shortage affects the supply of steel to be at least 4 tons of water is needed to produce 1 ton of steel. The deficit has affected the water inflow in the steel mills affecting the manufacturing industry and income generation.

e) the production of tea:

Because of reduced rainfall and lack of summer rainfall for the growth of first flush teas, tea production in FY 09, has decreased from 240 min kg in 2008 to just This year 216mn kg, resulting in income falling exports and lower consumption on the market. It can use its vast resources in a m. effective