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India declares drought: How will it affect country economy

During recent times, India is passing through one of its worst economic crisis having to deal with problems like, low growth, high inflation, high fiscal deficit and the highest ever trade account deficit. In fact, Standard and Poor rating 2011-12 has downgraded the rating for Indian economy from "Stable" to "Negative" In such a situation, occurrence of a drought will mean dooms day for Indian Economy and will push India further into a quagmire.

During the last decade India has already faced three droughts and the government has again on 2nd August , 2012, officially declared another drought like situation in many parts of the country. Monsoon rainfall is 14 percent below average in India, which depends on rainwater to feed more than 50 percent of its agricultural land. Some of the worst affected states are Karnataka, Rajasthan, Gujarat, Maharashtra. However, the driest region is the northwest, which, according to India's Meteorological Department, had received only 80 percent of its long-term average rainfall as of on August 23. This region envelopes some of the most productive agricultural states in the country, including Punjab, which produced 27.2 million metric tons of food grains in 2010-11. Other major producers in India's northwestern region include Rajasthan and Haryana, as well as the more north-central Uttar Pradesh.

Drought can be defined as an extended period of months or years in a region with little or no precipitation. A drought affects all aspects of our society, be it economic, political or social. For the time being, we limit our focus on its economic repercussions. The direct impact of a drought on Indian economy is in the area of agriculture. Though the contribution of agriculture in the GDP has dropped down to 13.9%, it continues to employ a large part of the rural population and provides livelihood to them. A weak monsoon and hence a crop failure will deal a blow to hundreds of millions of desperately poor agricultural labourers, small farmers and their families. Such dire situations will force the farmer to borrow loans from exploitive moneylenders which would then trap them into a vicious cycle of debt and poverty. School drop-outs, malnutrition and in the worst conditions suicide would define the conditions of these agricultural families during drought. We have already read about the suicides of farmers in the Vidarbha region of Maharashtra during the drought of 2009.

Rain water is extremely essential for agriculture as even today Indian agriculture primarily depends upon it for irrigation facilities. Drought affects the Kharif crops and has negative implications for India's rice yield and hits the economy of our country known to have paddy-culture. For the country's food security too droughts are threatening particularly at a time when the country's population is increasing rapidly. Occurrence of a drought will adversely affect the agricultural production by lowering the produce. This in turn would lead to high food insecurity in the nation. At the national level this food shortage and insecurity would lead to high inflation with extreme hike in prices of food grains making survival difficult for the poor. In such a grave situation, the Government may be forced to import food from other countries compromising on our trade balances. The adverse impact of food shortage leading to food import from other country at terms dictated by them are all known to us. Prior to Green Revolution India had to import wheat from USA at terms dictated by the US government.

In addition there will not be surplus of agricultural products like, Basmati rice for export to overseas country. This will further aggravate the trade deficit for our nation. A loss of crop also results in lower GDP.

It is not only the agriculture sector which will face adversities but also all other related sectors. For example, the agro-based industries will suffer a drop in the production level and incur huge losses due to shortage of agricultural raw materials, people involved in the backward and forward linkages with the farming sector like, people and organizations dealing in fertilizers, pesticides, transportation and entire supply chain for the food articles will also have low levels of activities and thus will be adversely affected.

Moving on from agriculture, drinking water problems would constitute one of the basic problems faced by one and all. The occupation of animal husbandry would be hard hit due to degradation of green pasture lands and loss of fodder. Further, India receives a lot of its economic resources from forests and drought reduces this forest cover. Lack of rainfall also increases the chances of forest fires leading to loss of trees and the resources.

Hence, it is clear that drought crushes our nation and it is important to control it. Apart from and more important than the government's initiative is our own initiative. We must ourselves try and conserve water in the form of water harvesting and saving. Only then will we be able to save our economy from the economic harm this devil inflicts on us.

Isha Roy