Why is the Indian Economy still affected by Floods and Droughts?

Rural India has been hard hit by the floods and droughts and it has affected both rich and poor farmers alike. 60 % of India's 1.1 billion population live outside cities. Agriculture contributes 17% to GDP but more than 50% of people depend on agriculture for a living. Because of this fact every major drought in India has cast it's shadow on the Indian Economy.

To better understand how the Indian Economy is affected, the following points are enumerated below: -

1. The service sector comprises only 10% of India's population but contributes 58% to the GDP. Nanda Kumar, secretary of the Ministry of Agriculture has said "We have managed earlier droughts. But we need to move some people out of agriculture. I don't think that a 17 percent share of GDP and a 50 percent share of employment are viable in the long run. "

2. The government's response involves short-term fixes rather than efforts to tackle the structural problems in the rural economy. A study by the International Food Policy Research Institute noted that India spent $25 billion in 2008 on fertilizer subsidies, but only $5 billion on agricultural investment -- even though investment yields 10 times more returns.

3. Only 14 per cent of the budget amount had been set aside for agricultural development, which was inadequate for accelerating the farm growth rate. Agriculture has become economically unviable on account of low investment, both by the government and private sector, and the delay in service delivery to farmers.

4. The farmers lack basic services such as education, roads, electricity and housing. Due to low literacy rates they cannot resort to other jobs to support themselves and this leads to an overdependence on the money lender. The mass suicide of farmers in 2007 was a result of the crushing debt accumulated. The flagship program NREGS has tried to alleviate the pain but it is still not sufficient.

5. Consumer spending decreases during the times of flood and droughts.

All these factors contribute to a Domino effect leading to the Indian Economy being adversely affected.

"Give a Man a Fish, Feed Him For a Day. Teach a Man to Fish, Feed Him For a Lifetime." We need to be cognizant of this proverb and act accordingly. The government granaries are well stocked to tide over the drought but instead of handing out dole to the farmers during the crunch time, the government should aim at making the farmers self-sufficient. Effective utilization of existing resources can make farmers less vulnerable to the vagaries of the monsoon. The govt. should implement new policies encompassing more effective use of groundwater and better monitoring of weather patterns and water supply. Implementing village water-security plans, and encouraging conservation and water recycling in the cities are also a step forward to help the rural farmers.

One problem now, as opposed to in the 1960s, is that there are no obvious technological breakthroughs to radically change the status quo. During the green revolution, India introduced high-yield seeds and fertilizers and expanded irrigation. Today, the challenge is more nuanced, involving a nationwide coordination effort to improve irrigation, better capture rainwater and conserve groundwater while lifting production.

While India is making leaps and bounds in the Service Sectors it is surprising that there is little technological advancement in the techniques of farming and irrigation. India cannot let a ' No Rain' scenario continue to affect the farmers and we must find a way around it.

Suhasini N