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Monsoon is undeniably the life-blood of Indian economy with 70% of its people directly related to farming. With adequate rainfall comes good agriculture benefitting many small and medium enterprises which in turn has a good impact on the overall development of the economy. Hence, annual rainfall is of prime importance to our nation.
Here are 5 significant ways good rainfall can play a key role in the flourishing of small and medium enterprises:
- Rains will help crops flourish: According to Madan Sabnavis, chief economist at CARE Ratings, Better monsoon will revive the farm sector, which has been weighed down by subdued agriculture output and falling farmers’ income in the last few years. Therefore, it’s a good news for the farming sector.
- Inflation will cool down: With a good rainfall, the food inflation is brought under control which is an important determinant in the interest rate of the country. A low inflation will bring down interest rates but boost the value of money.
- Benefits for consumer-goods Company: More money in the hands of villagers from good agriculture will benefit the fast moving consumer-goods company as more money means more purchase of everything ranging from toiletries to beverages. This could be a significant source of sales expansion as the broader economy is struggling.
- Benefits for Fertilizers & Pesticides firm: With the good rainfall leading to more plantation by farmers, the demand for fertilizers and pesticides can surely go up, benefiting these firms after two years of running in huge losses.
- Benefits for Automobiles Sector: Indian automobile sector has a huge market in rural India and a good monsoon will have a direct bearing on the purchasing power of these customers. The tractor and two-wheeler segments had plummet over the last two years but now the industry can expect an increase in sales with good monsoon.
Hence, it’s a win- win situation for the small and medium enterprises.
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