India-Pak War Possibly to Begin Soon: Tension between India and Pakistan is escalating. If this turns into a real war, it will have the most serious consequences on the Indian economy and the lives of ordinary citizens. In particular, the agricultural sector is one of the first sectors to bear the brunt of the war. The instability caused by the war can lead to a rapid increase in the prices of many goods. (India-Pak War)
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1) Agriculture
The border states of Punjab, Rajasthan, Jammu and Kashmir and Haryana are important food grain producing states of India. The war-like situation affects agriculture, water supply, seed distribution, agricultural machinery like tractors and availability of farm labour in these areas. As a result, the prices of commodities like wheat, rice, pulses and sugar may increase.
2) Shortage of Fertilizers and Seeds
A large amount of machinery, fertilizers, medicines and seeds required for agricultural production come from outside (domestic and international). War has a major impact on the production, transportation and distribution chain of these goods. Therefore, if seeds or fertilizers are not available to farmers on time, agriculture suffers and production decreases in the next season, leading to inflation.
3) Vegetables and Fruits Supply
War disrupts highway and rail transport. Due to this, vegetables, fruits, onions, potatoes, tomatoes cannot be supplied on time. As a result, their shortages can arise in metropolitan cities and prices can double. This puts pressure on consumers in urban areas.
4) Impact on the agricultural economy
War also affects employment, markets, and small scale agriculture-based industries in rural areas. As a result, the purchasing power of farming families is affected. As the government spends a large amount of money on the war, agricultural subsidies, insurance schemes, or support for organic farming may temporarily stop.
5) Direct impact of fuel inflation on agriculture
Farmers need diesel for irrigation, transportation, and to run machinery. If fuel prices hike due to war, there is a huge increase in agricultural production costs. As a result, profits decrease compared to production costs, and farmers find themselves in financial difficulties.
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Meanwhile, if an India-Pakistan war breaks out, its severe consequences are not limited to the border. Everything from agricultural produce, food supplies, fuel, vegetables, medicines, and household items become expensive. The agricultural sector in particular is the biggest casualty on the economic front.