However, it warned that La Niña conditions during the second half of the monsoon season could bring excess rainfall, flooding and destruction of crops, and that is indeed happening.
The mid-year RBI assessment is due on 9 October. Official GDP growth figures for the second quarter of 2024-25 will be known at the end of November.
Every RBI growth projection has been rightly hedged by warnings about global uncertainties. The most prominent is the warfare raging in two theatres.
Another uncertainty stems from climate events like vast floods in China, Vietnam and central Europe, and drought-fanned fires in southern Europe and California, disrupting supply chains and trade flows. Overlaid on all this is the suddenness of countervailing policy, such as the Chinese stimulus in the last week of September.
Indian trade has been badly affected by the Ukraine war. Pharmaceutical and other exports to Ukraine, which stood at $500 million annually pre-war, were sharply reduced, as were imports (principally sunflower oil) of more than $2 billion annually. African countries accustomed to seeing Ukraine as a perpetual source of foodgrain were affected much worse.
The US presidential election in early November could well have a decisive impact on the Ukraine war. Republican candidate Donald Trump’s talk in this campaign (as in prior ones) about “draining the swamp” in Washington has to do with his declared unwillingness to go along with prior funding commitments to military campaigns overseas.
A US Congress-approved bipartisan military aid package for Ukraine is currently in place. Called a loan, it carries a full debt-cancellation provision that can be invoked after 1 January 2025, effectively turning it into an outright grant. A large portion of it will be spent on US-produced military hardware, basically an indirect add-on to the US defence budget.
Trump, if elected (unlikely, but still possible), would take on board the reality that unless Russia gets a guaranteed land passage to the Crimean port (the Gorbachev deal left Russia with a large land mass served by just one port that is functional all through the year), the war would continue endlessly.
His push for a negotiated end to the war would not be popular. There has already been a shocking assassination attempt on Trump by a Ukraine supporter.
The war in West Asia is even less amenable to closure, since both presidential candidates in the US are irreversibly committed to the Israeli state.
On climate change, Trump in his first presidency pulled the US out of the Paris Accord. If elected again, world cooperation on climate action will suffer a serious setback, just when support for it is growing.
If Kamala Harris is elected (getting likelier by the day), global climate action would get a powerful and long-time supporter, although she has had to reverse her stance on fracking to appeal to the electorate in Pennsylvania, a key battleground state.
India has no levers of control over these global uncertainties. But there is civil unrest of purely domestic origin that has to be urgently attended to. India has in general been an oasis of stability in the South Asian region. But the Manipur situation continues to fester.
Street protests in Kolkata over the failure to provide safety to medical staff on night duty in a public hospital carried national resonance and boiled over into cities across the country.
Public safety has to be taken on by the ministry of urban affairs on a mission basis. There is need for apps like those developed during covid times that can be used to alert the nearest police van at the touch of a button.
Uncertainty about availability of skilled workers continues to hamper private-sector willingness to invest. A Haryana state portal (Haryana Kaushal Rozgar Nigam) advertisement for cleaning staff (‘safai karamcharis’) attracted thousands of applicants, some of them reported to be graduates with skills like nursery teacher training and pharmacy.
A possible reason for the serious mismatch between supply and demand for needed skills could be that applicants confine their job search within a short radius from home, where the issue of safety could be a restricting factor, language another. We still do not have an integrated Indian job market.
The quality of public structures is another worry. At a semiconductor and electronics India Expo held in Greater Noida in mid-September, heavy rain on the day of the event poured right through the roof of exhibition halls, making drenched visitors look for exits rather than exhibits. A leaking roof is merely inconvenient, a collapsing roof (in June at Delhi airport) is a life-and-death matter.
In the GDP data for the first quarter, the construction sector showed the highest sectoral real growth, at 10.5%, largely driven by government capital expenditure. But those structures have to endure in order for them to lay sound foundations for the India growth story.