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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.

BMC auctioning three land parcels to raise funds, says Aaditya

Updated: Oct 22, 2024

Aaditya

Mumbai: Shiv Sena (UBT) leader Aaditya Thackeray on Thursday alleged Mumbai’s civic body had decided to auction three land parcels to raise funds and make up for the “loot” of the metropolis by the Eknath Shinde government.


The Brihanmumbai Municipal Corporation, which is being run by an administrator now, has decided to auction the Chhatrapati Shivaji Maharaj Mandi (Market), the Brihanmumbai Electric Supply and Transport (BEST) Malabar Hill Receiving Station and the Worli Asphalt Plant, Thackeray pointed out.


“The sale of Mumbai is being done by the Eknath Shinde regime to benefit its favourite builders and contractors,” he alleged.


A criminal investigation will be conducted into the matter after the Maha Vikas Aghadi government comes to power, Thackeray added.


“So on one end, they looted the BMC and Mumbai and gave the money to their favourite contractors. Now, by auctioning these iconic and important land parcels, the BMC will be left without both funds and plots,” the Shiv Sena (UBT) leader and former state minister claimed.


When Shiv Sena started controlling the BMC in 1997, its finances were in deficit but by 2022 his party turned around the fiscal health of the civic body, Thackeray said.


Alleging that the Shinde government wants to drive Kolis and fisherfolk out of Mumbai, he said, “We will oppose this. It has to remain and be made into a fish market, and (should be) in the ownership of the BMC.”


Aaditya puppet for urban naxals: Shelar

Bharatiya Janata Party ( BJP ) Mumbai chief Ashish Shelar has called Uddhav Thackeray’s son and Shiv Sena (UBT) leader Aaditya Thackeray as a puppet for urban naxals after former’s comments on the Dharavi Redevelopment project and has also challenged him for a debate.

Ashish Shelar said that the project is a necessity and a priority project, adding that Uddhav Thackeray-led Shiv Sena and Congressleader Varsha Gaikwad are peddling lies.

Aaditya Thackeray seems to have become the spokesperson of urban Naxals. Without studying the subject (Dharavi) in detail, Aaditya Thackeray is speaking like an ignorant. I have seen that these people have been trying to set a narrative regarding Dharavi and the re-development work,” Ashish Shelar said.

He challenged Aaditya Thackeray and Varsha Gaikwad in a debate on the Dharavi Redevelopment Project.

“Uddhav ji and the people of his party – Aaditya Thackeray and Varsha Gaikwad have started this false narrative regarding Dharavi. I openly challenge Aaditya for a debate. I want to ask him that 70 per cent of the homes in the Dharavi Redevelopment Project will go to Marathi people, Muslims and Dalits. It is their rightful home, so why are they putting roadblocks by creating a false narrative?”

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