Cotton is said to be a gift of the Indian sub-continent to human civilization. The key role that cotton plays in our economy can be gauged from the extent of area under the crop as well as trade, processing, manufacture, export of raw cotton and cotton textile goods. Cotton industry is one of the largest employers in the country accounting for nearly 15 per cent of the total labour force. There are about 60 million owner cultivators in India, out of which about 15 million produce cotton. The processing and manufacturing of cotton from Kapi to textile provides employment to more than 15 million people in the country. Being a commercial crop, cotton is so remunerative that it is being grown by farmers in even un-prescribed agro-climatic zones. The reason for this, practice rests with the reality that it fetches higher returns. In recent years cotton crop has been experiencing many ups and down due to natural and man-made calamities. Dependency of the crop on rain fall, fluctuations of the area under the crop, fluctuations in productivity due to pests and diseases, fluctuations in prices are the few important factors.

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1)Dr.A.Siva Sankar received his Ph.D. degree in Econometrics from Sri Venkateswara University, Tirupati,India. Currently he is working as Academic Consultant in the Department of Econometrics. 2)Dr.V.Balakrishnama Naidu,Head, Professor of Econometrics, Department of Econometrics, S.V.University, Tirupati, India.