Abstract The Bundelkhand region in India is faced with challenges such as rain-dependency, insufficient irrigation, and vulnerability to climate change and droughts. Comprising of thirteen economically weak and underdeveloped districts, the area heavily relies on agriculture for employment, livelihoods, and economic development. The agriculture sector plays a crucial role in the region’s economic growth but droughts have frequently caused disruptions. This study aims to examine the impact of droughts on the agricultural and overall economic growth rate of the region using a mixed method approach. It conducts regression analysis using district-level longitudinal data obtained from the Directorate of Economics and Statistics of the governments of Uttar Pradesh and Madhya Pradesh in India. The empirical analysis is for the period 2005–2017. The results show that drought lowers the agricultural and the aggregate growth rate by ??14.51% and ??4.33%, respectively than no drought condition. The study is novel to undertake such analysis at the regional level from the disaster management and regional development perspectives. Also, the post-drought financial relief shows a negative impact on the agricultural growth of six districts in the region. The funds were spent towards the relief-oriented works rather than long-term mitigation measures, causing such negative implications. The study also shows lacuna in drought governance, such as non-coordination, misplaced priorities, changing cropping patterns, corruption and administrative negligence. These findings are important for the governments and policymakers to design appropriate drought management strategies, and to allocate the financial resources to the agriculture sector.
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