Even if heat waves strike again and crops are 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 fairly small share of our GDP,” said Gupta, the first woman director-general of the New Delhi-based independent economic policy think tank.
The government should remain flexible in taking appropriate policies to counter any weather-related setback to crops, she said in an interview.
India’s economic growth unexpectedly fell 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 tackle sticky inflation, which continues to stay above the central bank’s target range of 2%-6% despite several rate hikes.
Terming an estimated growth of 6.5% in 2023-24 as reasonable, Gupta, who is also a member of the Economic Advisory Council to the Prime Minister, said India was on track to meet the 7% target for the current fiscal.
The India Meteorological Department said the likelihood of heat waves in most parts of the country in the coming months has increased. The nation faced warmer-than-normal temperatures last month, threatening crops and pushing demand for electricity to near-record levels. –With assistance from Debjit Chakraborty.