It is official now. Two hundred and seventy-eight districts out of approximately 604 districts in the country are reeling under drought and agriculture growth and in all likelihood they would be in the negative zone. Going by government estimates, the kharif production could fall by over 30 million tonnes this year. Undoubtedly, such a dismal scenario would only result in slump in rural economy which did not augur well for the overall economy.
In the last one year, the domestic industry has been somewhat cushioned from the economic downturn due to local especially rural demand. If the agriculture output falls, local demand falls as there is less disposable income and that would hit the entire economy.

• A look at the size and potential of rural market would tell why decline in demand in countryside due to slump in agriculture growth could hit the nation’s economy Rural consumers account for 64% of the country’s total consumer base
• Out of total rural retail market of US $ 280 billion in the country, Rural retail market stood at US $ 112 billion
• Nearly 50% of the Indian market which includes 220 million rural household is potential car buyers
• With less than 10 % penetration of two wheelers in rural area, the potential is huge
• Growth in consumer durable goods sector is 25% in rural India against 7-10% in urban areas
• According to NCAER (National Council of Applied Economics) , Rural India consumes at least 70% of toilet soap , 50% of TV , Fan , Bicycle , Tea and wrist watches
Incidentally, four of the five biggest rural markets in the country which include UP, AP, Maharashtra , West Bengal also account for largest producers of kharif crops. Given the size of rural consumers and their capacity to spend in these states hit by drought , the economy is bound to suffer .
Needless to say that the Agriculture sector which employs around 60% of the total workforce in the country and contributes 18% to the GDP, any slump would make the economy shiver and nosedive.