Key Points
In what could spell fresh trouble for policymakers, India's central bank expects the summer crop of vegetables and fruit crops to be impacted by the 'exceptionally' hot summer season and low reservoir levels...
The impact of the severe heatwave could hamper the last mile of disinflationary process as the central bank seeks to bring retail inflation to its target of 4 per cent, which it says has been interrupted by volatile and elevated food prices...
"The exceptionally hot summer season and low reservoir levels may put stress on the summer crop of vegetables and fruits..
Adverse weather conditions tend to impact food prices negatively, however, the issues are not restricted to price rise.. "India is particularly vulnerable to losing labour productivity due to heatwaves as a large section of its workforce is engaged in outdoor work at this time of the year, as in agriculture, construction and mining..
"There is increasing evidence that in the post-pandemic years, a trend upshift is taking shape, which is shifting Indias growth trajectory from the 2003-19 average of 7 per cent to the 2021-24 average of 8 per cent or even more, powered by domestic drivers," RBI said.. Indicators suggest that private consumption is resuming its role as the main driver of demand in India and is getting broad-based to include rural consumers in the country, RBI said..
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