El Nino effect may shrink India's GDP by 1.75%: Assocham
As per a report by the Associated Chambers of Commerce and Industry of India (ASSOCHAM), the 5% deficiency in rains due to possible El Nino factor in this monsoon could impact India’s Gross Domestic Product (GDP) by 1.75% in the 2014-15 fiscal, affecting lakhs of unskilled jobs. Rain deficit could also impact food inflation, which has always been a concern to policy makers. The loss to the GDP of about 1.75 % would be equivalent to around Rs 1,80,000 crore.
Indian agriculture in heavily dependent on rains as about 60% of net sown area of the country is rain-fed. With every 1% deficit in rains, the country’s GDP plummets by 0.35%. Therefore, a good agricultural output is a must for India to increase demand for services and industrial products.
India is forecasted to have below normal monsoon in 2014 with Meteorological department predicting 95% rainfall because of the El-Nino effect, which is generally linked with the warming of ocean water.
Month: Current Affairs - May, 2014