StatsGuru: Analysis of the economic impact of a weak monsoon

Click on graphic

Rural demand has struggled following another sub-par monsoon. As Table 1 shows, this year's monsoon has been particularly deficient in states in which irrigation penetration is not high and therefore, dependence on rainfall is higher. Table 2 shows that central and southern India have been particularly badly hit this year. As a consequence, analysis in Table 3 by CRISIL shows that kharif sowing of rice and coarse cereals lags long-term trends.

Agricultural income has been further hit by a major downturn in the world prices of agri-commodities, as shown in Table 4. The consequences on rural demand of this stressed farm income are visible in the sales growth for two-wheelers and tractors in recent times, shown in Table 5. Companies with high rural exposure have also seen sharply declining revenue of late, as Table 6 reveals.