(MENAFN- The Peninsula) Bloomberg
As concerns mount over soaring temperatures in India and the impact on growth, a key adviser to Prime Minister Narendra Modi says the economy can withstand any potential weather shock.
The nation's weather bureau predicted hotter temperatures over the coming months, stoking worries about a repeat of the devastating heat last year that damaged crops, raised food inflation and prompted the government to restrict exports of wheat, rice and sugar.
Even if heat waves strike again and crops get affected, overall growth should not suffer, according to Poonam Gupta, head of the National Council of Applied Economic Research.
'At 17%, agriculture and allied activities account for a rather small part of our GDP,” said Gupta, the first woman director general of the New Delhi-based independent economic policy research think tank.
The government should stay nimble in taking appropriate policies for countering any weather-related setback on crops, she said in an interview.
India's economic growth unexpectedly slowed to a three-quarter low of 4.4% in the three months to December. Any setback to crops due to extreme weather in the coming weeks could further complicate the Reserve Bank of India's efforts to counter sticky inflation that continues to stay above the central bank's target range of 2%-6% despite several rate hikes.
Gupta, who is also a member of the Economic Advisory Council to the Prime Minister, termed an estimated growth of 6.5% in 2023-24 as reasonable, and said India was on its way to achieve the 7% target for the current fiscal.
The India Meteorological Department said the probability of heat waves in most parts of the country in the coming months has increased. The nation faced higher-than-normal temperatures last month, threatening crops and pushing electricity demand to near-record levels.
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