Projected weak monsoon could weigh on rural demand, private consumption: RBI Governor
The Reserve Bank of India (RBI) Governor Sanjay Malhotra has cautioned that the projected shortfall in south-west monsoon rainfall could weigh on rural demand and private consumption. He said a weaker monsoon could affect agricultural production and, in turn, influence spending patterns in rural areas. While recognising the risks, he said various government initiatives are expected to cushion the effect.
RBI Governor said rural demand and private consumption have remained healthy so far but acknowledged that some moderation may be inevitable. However, he said programmes and initiatives for crop diversification, water harvesting and conservation, climate-resilient practices and short-duration crops, among others, are expected to mitigate the impact.
He also pointed to broader risks from rising input costs and supply disruptions, which could weigh on economic activity and consumption if pressures persist. He said going ahead, the rise in prices of energy and other inputs, coupled with supply disruptions, is likely to weigh on economic activity. He noted that the eventual impact would depend on how long the conflict continues and how quickly global supply chains return to normal.
