| | | Good morning! | | There's signal. Then, there's noise. And the problem for anyone attempting to make sense of the latest GDP data from the National Statistics Office is that there's a lot of the second in it. And high frequency indicators (data that can be used to assess the economy released with a higher frequency than GDP data, perhaps once a month) aren't of any help. The headline numbers show that India was the fastest-growing major economy in the world (expanding at 8.7%) in 2021-22, and that it will almost certainly retain that distinction in 2022-23. This is entirely accurate, but it doesn't capture the entire story of what's happening in the economy. So, what's really happening? Here's what we know. One, the economy is slowing — and it's not a base-effect problem. Two, inflation is a matter of concern, and will become more so in the coming months as China opens up further and oil prices rise. Oil at $150 is possible (and also reasonably probable). Three, profits of Indian companies are moderating — and given that the economy's recovery post-Covid-19 has largely been profit-driven, this should worry everyone. Four, even as it seemed like the terms of trade were becoming in favour of cultivators, the government's efforts to rein in inflation have ensured that they do not — and this doesn't bode well for the rural economy. Five, that what we've seen over the past year-and-a-bit in India is a K-shaped recovery that has benefited companies and individuals at the middle and the apex of the pyramid (and not those at the bottom) is now very evident. There are more nuanced messages in the data, especially when seen along with revenue and expenditure (and therefore, deficit) numbers released earlier this week by the Controller General of Accounts. The policy challenge for the government is clear. As HT wrote in an editorial, it will have to control inflation "without smothering nascent demand" and, with companies focusing on costs, "will have to still do the heavy lifting on investments". | | THINK The Reserve Bank of India will increase the policy rate again next week — RBI governor Shaktikanta Das has said as much — but it will be interesting to see what it estimates GDP growth for 2022-23 at; in April, it projected that the economy would expand by 7.2%, and it did not put forth a number during an unscheduled meeting of its monetary policy committee in May, when it raised the policy rate in an attempt to cool inflation. Analysts are scrambling to revise their numbers downward, though. At 8.7% growth, India edged out China, whose economy grew 8.1%, and through 2027 at least, India's economy is likely to expand at a faster rate than China's, Roshan Kishore pointed out in his weekly column Terms of Trade as he embarked on a deeper analysis of the economies of the two countries and the economic challenges they faced. | | | | THINK MORE This newsletter's primary theme this week may be the economy, but elections can never be completely absent in the great Indian news cycle. This time, it is the Rajya Sabha elections for 57 seats across 15 states on June 10, although the only real contests are in Haryana, Rajasthan, Karnataka, and Maharashtra. There was a time when elections to the Upper House were boring affairs. Not any longer. With the Bharatiya Janata Party backing influential independents in Rajasthan and Haryana, and the prospect of cross-voting by some Congress legislators, this round of Rajya Sabha elections is proving especially interesting. | | KNOW Amidst all this, Covid-19 numbers are inching up across some large Indian cities. There's still no cause for alarm — hospitalisation rates remain insignificant, as do death rates — and genomic analysis hasn't (yet) pointed to the presence of any worrying variants, but the numbers are a reminder that the pandemic (now endemic) is still on. They are also a reminder that India's booster shot coverage remains abysmally low. The fact that booster shots are not free in most parts of India could be one reason for this; the low number of vaccination sites could be another; but it is very likely that the main reason is sheer inertia, especially because things are alright now. That is not good news. | | LEARN Nor is what's happening to the environment. Fifty years ago, a group of researchers using a computer simulation to study system dynamics published The Limits to Growth, perhaps the first report to articulate the disastrous consequences of the model of development the world preferred then (and still does, despite averments to the contrary). The same year the report came out, the United Nations hosted its first human environment conference in Stockholm, widely recognised as the moment the concept of sustainability or sustainable growth was born. (1)_1654281602870.png) (Click to expand) This week saw the 50th anniversary of the conference as well — India was represented by environment minister Bhupendra Yadav — during which he said that the principle of climate justice aims at providing a level playing field to all communities across the world by empowering them with financial and technological interventions. | | READ MORE What makes Praggnanandhaa click? Punjab's Gangsta culture. India's top translations editor on the journey of translated literary work in India. The curious case of Mumbai's missing speedboat engines. | | OUTSIDE There was a time when my younger colleagues in the newsroom swore by apparel brand Shein. Then, after the Indian government banned the Shein app, the brand faded (although it remained available on other platforms). The latest issue of Wired had a fascinating story on Shein by Vauhini Vara — a story that touches on all the aspects that give fast fashion a bad rap (it's unsustainable, exploitative, deviously persuasive) and how Shein overdoes almost every one of those. | | WHAT I'M READING  (Click to expand) We are a country obsessed with our own greatness, past, present, and future — to an extent that precludes any intelligent debate on issues. Rahul Sagar approaches this problem cleverly — by looking to the past. His book, To Raise A Fallen People: How Nineteenth-Century Indians Saw Their World and Shaped Ours asks the important questions we need to, about education, trade, foreign relations, race, and India's moral right to lead the world, but using the words of 19th century thinkers and leaders. Helping us navigate these waters is Sagar's erudite essay that introduces the themes and concludes that many contemporary debates are actually much older. | | WHAT I'M LISTENING TO Some new music by a favourite band that I remember describing as the best contemporary American rock band in this newsletter many editions ago. Wilco's lengthy (and I'm not complaining) new album Cruel Country arrived last week. The music is Americana at its best, and, cadence and lyrics apart (Jeff Tweedy is one of the best songwriters of our times), is reminiscent of the music of bands such as the New Riders of the Purple Sage, even more so than that of The Band, the Canadian (okay, it had one American) band that defined the genre for many of us. Cruel Country has 21 songs, almost as many as the latest Big Thief album I wrote about a few months ago, and each one of them is worth a listen. And another. | Please share your feedback with us What do you think about this newsletter? | | Were you forwarded this email? Did you stumble upon it online? Sign up here. | | | | | | Get the Hindustan Times app and read premium stories | | | | | | View in Browser | Privacy Policy | Contact us You received this email because you signed up for HT Newsletters or because it is included in your subscription. Copyright © HT Digital Streams. All Rights Reserved | | | | |
