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Periodic drought affects both developing and the developed countries around the globe with direct impacts on agriculture and on other productive sectors reliant on water. However, it is in developing countries, where drought is highly correlated with the performance of the overall economy, as a result of heavy reliance on agriculture. India is amongst the most vulnerable drought prone countries in the world, where a drought has been reported at least once in every three years in the last five decades. An attempt has been made in this paper to provide a comprehensive idea of drought through interpretation and correlation of various drought causative parameters. As a state or even a district is too large a unit with varying covers, soil types, crop types, etc., the sub basin level assessment has been considered for the detailed drought assessment in this study. The Tel watershed covering an area of 2756 km2 and lies between 19 17' and 20 00' N latitude and 82 30' and 82 59'E longitude near Bhawanipatna region of Kalahandi district of Odisha, India was selected as the study area. Spatiotemporal variation of seasonal drought patterns and drought severity in the Tel watershed was analyzed by the Standardized Precipitation Index (SPI) using GIS based interpolation. Normalized Difference Vegetation Index (NDVI) and Normalized Difference Water Index (NDWI) were generated to understand the impact of precipitation deficiency on vegetation vigor and growth. The analysis shows that drought assessment by watershed approach and the combination of various parameters can offer better understanding and better monitoring of agricultural drought conditions in developing countries.