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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.

Lingua Pragmatica

Updated: Mar 20, 2025

As Southern leaders like M.K. Stalin rage against Hindi, Andhra Pradesh’s Chief Minister Chandrababu Naidu offers a model of pragmatism over parochialism.

Chandrababu Naidu
Andhra Pradesh

Amid the cacophony of opposition in southern states to Hindi, Andhra Pradesh CM N. Chandrababu Naidu has taken a markedly pragmatic stance by remarking recently in the state Assembly that there was no harm in learning other languages. Hindi, Naidu noted, was useful for communication across India, particularly in political and commercial hubs like Delhi. His remarks, though avoiding explicit mention of the NEP, were widely seen as an endorsement of multilingualism and a rebuke to the linguistic chauvinism that has gripped parts of the South.


Few issues in India stir political passions quite like language. It is not merely a means of communication but a marker of identity, a relic of colonial resistance, and a source of political mobilization. In the southern states, where anti-Hindi sentiment has long been entrenched, the National Education Policy (NEP) 2020 and its three-language formula have reignited old tensions. No state embodies this defiance more than Tamil Nadu, where the ruling Dravida Munnetra Kazhagam (DMK) led by M.K. Stalin has framed the policy as an assault on its linguistic autonomy.


Naidu’s words, welcomed by his ally and Deputy Chief Minister Pawan Kalyan, mark a sharp contrast with the DMK’s position. Tamil Nadu’s hostility towards Hindi dates back to the 1930s, when C. Rajagopalachari’s attempt to introduce it in schools met with fierce resistance. The anti-Hindi agitations of the 1960s cemented the DMK’s ideological stance, with its first Chief Minister, C.N. Annadurai, famously warning that Hindi imposition could push Tamil Nadu towards secession.


The question, however, is whether this rigid opposition serves Tamil Nadu’s interests. While Stalin, with an eye to the upcoming Tamil Nadu Assembly polls, has been relentlessly portraying Hindi as a threat to his state’s regional identity, Naidu, a partner of the BJP-led Centre, is framing it as a tool for economic mobility. His argument is not that Hindi should replace Telugu or English but that it offers a competitive advantage.


The economic case for multilingualism is compelling. Indians who speak multiple languages tend to have better job prospects, higher earnings and greater geographic mobility. Andhra Pradesh’s Telugu-speaking diaspora is a case in point. Telugus make up a significant proportion of Indian-origin professionals in the United States, the Gulf, and Southeast Asia as Naidu pointed out, hinting that this success story was built not on linguistic rigidity but on adaptability.


In a country where inter-state migration is rising and where Hindi remains the most widely spoken language, refusing to learn it amounts to self-imposed isolation. Tamil Nadu’s approach, by contrast, risks limiting its youth. The DMK government has refused to implement the three-language policy, keeping schools strictly bilingual with Tamil and English. Its justification that Hindi is not necessary for global success could be true in a narrow sense but ignores the domestic context. If Tamil filmmakers can dub their movies into Hindi to expand their audience, why should Tamil students be denied access to the language that could open more doors for them within India?


The DMK has accused successive central governments, particularly under the Bharatiya Janata Party (BJP), of pushing Hindi at the expense of regional languages. Yet, rejecting Hindi outright is an overcorrection. The reality is that Hindi is an important language in India’s economic and political landscape. Naidu’s position, one of accommodation rather than confrontation, offers a middle ground that other Southern leaders would do well to consider.


Some states already recognize this. Karnataka, despite its own history of linguistic pride, has allowed Hindi to be taught as an optional language. Kerala, whose migrants work in Hindi-speaking regions and the Gulf, has been less hostile to Hindi education. Naidu’s model, balancing regional identity with practical necessity, offers a way forward. Languages should be embraced, not politicized. Southern leaders would do well to listen to him.

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