Indian economy faces deep recession with below par monsoon if not a drought in several states
Shankar Rao
Jun. 28, 2009

Indian economy is heavily dependent on agriculture and the monsoon. The recent below par monsoon if not a drought in several states is major concern.

It will be a major challenge for the Congress party led UPA coalition to deal with absence of rains in States like Punjab and Haryana which are major contributors to State pool needed to provide food security and keep Indian public distribution system running. India is lucky to have a large reserve stock and we need not import food grains to feed our people. But that may not be sufficient.

The roaring recession in the West is affecting India already. The drought related recession would create massive chaos in Indian economy.

The UPA Government is aware of the challenges. It is pushing ahead with schemes like social safety net and rural employment growth. The challenge is more difficult as there is need to keep rural economy clicking as the demand from this sector has kept wheels of progress moving even when sunshine sectors like IT, industry and service sector are stagnant or growing at a very slow pace. If the rural demand dries up, the impact of recession will be felt more strongly. The reality sector and exports also will need urgent attention.

India faces serious economic down turn in the next twelve months.

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