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By:

Abhijit Mulye

21 August 2024 at 11:29:11 am

RBI forced to rethink inflation, growth

Mumbai: The undeniable reality of climate change is rapidly transitioning from an ecological warning to a severe economic crisis in India. Global warming is no longer just altering natural ecosystems; it is fundamentally rewriting the rules of the nation's macroeconomic stability. A stark illustration of this shift comes from the HSBC report published on Monday, which highlights how rising surface temperatures and the looming threat of El Niño are directly forcing the Reserve Bank of India to...

RBI forced to rethink inflation, growth

Mumbai: The undeniable reality of climate change is rapidly transitioning from an ecological warning to a severe economic crisis in India. Global warming is no longer just altering natural ecosystems; it is fundamentally rewriting the rules of the nation's macroeconomic stability. A stark illustration of this shift comes from the HSBC report published on Monday, which highlights how rising surface temperatures and the looming threat of El Niño are directly forcing the Reserve Bank of India to reconsider its monetary policy, proving that climate shocks are now dictating everyday financial realities. ​ For decades, economists and policymakers have anxiously tracked the Indian monsoon, relying on rain gauges and reservoir levels to forecast agricultural output and inflation. However, HSBC’s analysis reveals a startling paradigm shift: tracking rising temperatures has now become a far more accurate method for predicting food inflation than observing traditional rainfall patterns. As average surface temperatures breach historical thresholds, the sensitivity of food prices to extreme heat has increased dramatically. During El Niño years, the probability of severe temperature spikes is now significantly higher than the chances of a rainfall deficit. These intensifying spikes mean the thermometer has become a far more vital forecasting tool for the central bank than the rain gauge. ​ The effects of this warming planet are cascading through various walks of life, starting at the very roots of the agricultural sector. Intense and frequent heatwaves are no longer just wilting delicate, perishable crops like fruits and vegetables, which have traditionally been highly vulnerable to sudden temperature fluctuations. The soaring mercury is now directly threatening the resilience of durable staple crops, including cereals, pulses, oilseeds, and sugar. When these crucial crops fail to withstand the intensifying heat, the immediate fallout is a sharp surge in food prices. While robust granaries might offer a temporary buffer, the overarching trend points to persistent agricultural distress, threatening food security and pushing the financial burden directly onto the plates of ordinary citizens. Complex Web ​This climate-induced disruption is creating a complex web of challenges for the national economy. The HSBC report predicts that the combination of El Niño-driven temperature shocks and global energy pressures could push headline inflation to an average of 5.6 percent in the 2026-27 financial year. This overlapping environmental and economic crisis leaves the Reserve Bank of India in a precarious position. To combat the inflationary heat, the central bank is projected to deliver two interest rate hikes between late 2026 and early 2027, ultimately pushing the repo rate to 5.75 percent. However, the central bank must tread carefully, as these relentless climate shocks are simultaneously dragging down the nation's economic momentum, with GDP growth projections downgraded from a robust 7.4 percent to a sluggish 6 percent. ​ Ultimately, the heaviest toll of this shifting climate is borne by the most vulnerable segments of society. The intersection of severe weather events, rising food costs, and tightening economic policies strikes hardest at the informal sector. Rural households, small agricultural businesses, and daily wage earners find their livelihoods increasingly squeezed by extreme weather forces entirely out of their control. The warming climate is fundamentally changing the drivers of India’s economic growth, turning environmental predictability into a luxury of the past. As policymakers grapple with these twin shocks of heat and inflation, it is evident that climate change has firmly rooted itself in every facet of Indian life.

Bharat’s Jetson Cities, Light-years Away from Nature

Updated: Jan 20, 2025

Jetson Cities

One thing is for certain: our Bharatiya cities, the big metros and towns, are fast becoming like the ‘Jetson’ cities. For those who are unaware of Jetson cities, these were first shown in the famous Hanna-Barbera cartoon series, the Jetsons, set in the 2100s, where cities are air-tight glass globules tethered to the ground, and the only way to get in and out are the flying cars. Yes, we, the city-dwellers, aspire to tall skyscrapers, spectacular bridges, world-class tunnels, swooshing metro trains, and we are building Jetson-like flying cars. A few HD drone images here and there, during the day and at night and around twilight, and we are content that our cities have become the cynosure of our own eyes. We want our cities to be brightly lit, with neon signs, laser shows, and large billboard videos. We would then fulfil our inner desire to have a city on par with Tokyo, New York, and Shanghai.


Our buildings, designed for the next 30 years, are well air-conditioned, shielding occupants from a soupy dust bowl of brown smog, soot, particulate matter, and fine dust. It is said that most new home buyers invest at least 10% of their property’s price in enhancing the interiors, soundproofing their homes, using air purifiers and conditioners, and disconnecting from the outside world for that much-needed solace. Indeed, large builders promote their projects as close to nature amidst tranquillity. However, there is always another builder eager to get one plot of land ahead of yours to enjoy that nature. To be truthful, access to nature now comes at a premium - even the skies.


Let’s assume the working-age population is occupied in the leisure of our Jetson cities, but how many of their young school and college-going kids have seen the long arm of the Milky Way galaxy from their cities? How many have witnessed a comet zooming by? How many know about endemic plants with medicinal properties? When did they last see a chirping house sparrow? How many know that the nearest sewage drain was once a freshwater stream? When did they last find their suburban beach prettier than the resort beaches of Maldives?


The intent to ask these questions is simple: Bharat is currently at a crossroads. Pundits are enthusiastic about a cultural renaissance on the horizon. Corporate leaders, on the other hand, want us to invest hundreds of hours each week to pay our dues to the growth of the national GDP. But no one asks, if a cultural renaissance is to occur, who will generate the new understandings and insights of nature that arise typically during such a period of human advancement? No one is actually asking, for whom are we building the nation if there is no time for children, or worse, if there is no time or intent to have children. In the process of growing rich, we are about to become old. By 2047, 65% of the population under the age of 35 will grow beyond 35 all at once, and we’d have an enormous population in advanced ages with a tapering young population, a graph that looks like a banyan tree. Unfortunately, that young population will have no access to the knowledge that nature has to offer, neither flora and fauna nor the seas and the skies.


Our urbane lifestyles need tempering. Such tempering can occur only if we ensure the revival of natural sciences during this period of cultural renaissance and nation-building. Let’s not rely solely on the educational system. With Indian Knowledge Systems, constructive changes are underway, and academic curricula are poised to improve for the greater good. However, true knowledge arises only when parents and grandparents introduce children to nature. Genuine understanding also develops from extracurricular activities in schools and colleges that encourage kids to observe, journal, and act on their discoveries. On the positive side, our country’s forest cover is increasing, as announced by the government. However, efforts must be made to ensure that every school or college, whether in Mumbai, Vijayawada, Gorakhpur, Ratlam, Thrissur, Bhuj, Faridabad, Imphal, Manali, Cuttack, or Ajmer, guarantees that their students are well aware of the endemic nature of their surroundings and are regularly observing and recording data on whatever interests them. Let kids observe rivers and understand the volume of water that flows through them. Let children learn about the decline of house sparrows in their cities and what steps should be taken to revive their populations. Let them study the bees in their nearby groves and recognise the vital role these bees play in nature.


Of course, you need to learn AI, robotics, fintech, the next generation of management courses, and all the engineering bells and whistles. However, we must not leave the next generation with inadequate comprehension and skills for understanding nature. We must ensure that nature conservation is not merely lip service or a tool for politicised green activists. This can be achieved if natural sciences are given the respect they deserve at the school, undergraduate, and postgraduate levels.


Indeed, I am a plebeian, and you might feel that you, too, could write a rant about the plight of our urban lives. Urban development and municipal experts have many solutions to propose, but few are willing to take action. However, that is not the issue I wish to highlight. I aim to illustrate a much larger concern—that Indian city dwellers are disoriented and devoid of nature, lacking a guiding star to lead them toward a brighter future. Our cities of Mumbai, Delhi, Bengaluru, Ahmedabad, Kolkata, and Chennai have taken on characteristics reminiscent of Jetson-like cities. We show little regard for the Nagar Devata, Gram Devata, and Van Devata, who have protected the cities, towns, and forests that once surrounded us. We wait for formal governance to clean up our beaches, rivers, and ponds without making sufficient efforts to prevent pollution in the first place.


For those striving to grasp spirituality not through the Puranas and Aadi-Granth but through new-age podcasts, I recommend watching Vinay Varanasi’s podcast on Bhagavan Vishnu’s Dashavatar. If it is clear that Bhagavan Vishnu does not tolerate disregard for Bhudevi or Mother Earth, why do we, the devotees of Bhagavan Vishnu, continue to pollute our Mother Earth—her air, soil, waters, and sounds? Or have we taken Elon Musk's words at face value, assuming our next destination is Mars after destroying Earth, only to ruin Mars later, even worse than its current clinically sterile state? If that is the case, then bear with me when I say this: these Jetson cities stand on precarious pillars of ego, victimhood, apathy, and consumerism, waiting to be toppled either by the true harbingers of order or by false prophets. Therefore, teach the next generations to observe nature, appreciate our coexistence with other species, and venerate the forces of nature. By doing so, we humans will be good, at least for the next thousand years. If not, prepare for a bleak future by the end of this century.


(The author is a Space and Emerging Technology Fellow at the Centre for Security, Strategy and Technology, Observer Research Foundation, Mumbai. Views personal.)

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