homeeconomy NewsIndia's inflation concerns loom large in the short term, but long term growth prospects shine: Experts
India's inflation concerns loom large in the short term, but long-term growth prospects shine: Experts
In an interview with CNBC-TV18, Arvind Sanger, Managing Partner of Geosphere Capital Management spoke about India's inflationary concerns in the near term while expressing optimism about the country's long-term growth trajectory.
As the nation grapples with delayed monsoon and rising food prices, the impact on key commodities such as tomatoes has become a subject of discussion.
Persistent price hikes in vegetables and pulses are being attributed to the delayed monsoon and the potential for inadequate rainfall across certain regions of the country. The prices of tomatoes, which are in severely short supply, are expected to cross the Rs 100 per kg mark soon, according to the news daily -–The Hindu. Last week, the price of tomatoes shot up to over Rs 80 level.
In an interview with CNBC-TV18, Arvind Sanger, Managing Partner of Geosphere Capital Management, spoke about India's inflationary concerns in the near term while expressing optimism about the country's long-term growth trajectory.
One of the notable examples of rising food prices in India is the surge in tomato prices. The delayed sowing has led to reduced tomato supplies in the market, causing a demand-supply imbalance. With the limited availability of tomatoes, consumers are witnessing an increase in prices.
Meanwhile, Mahesh Palawat, VP-Meteorology and Climate Change at Skymet Weather Services said, “Despite the delayed onset of monsoon, monsoon has progressed very well in the last 2-3 days and covered most parts of the country and now rain will continue so sowing will help. We do not expect any crop damage in the next 15-20 days and water, which is essential for the crops to sustain, will be available to farmers.”
Talking further about inflation, Sanger said, “The monsoons are off to a bad start and if inflation is going to reappear, is the market too sanguine about the rate cycle about the inflation outlook and therefore, could you see RBI having to go back to raising rates again. There are some uncertainties that are India-specific that we have to worry about.”
Despite the near-term challenges posed by inflation, Arvind Sanger emphasized that India's long-term growth story remains positive. The nation's vibrant economy, burgeoning middle class, and ongoing reforms provide a strong foundation for sustained development.
According to a recent report by the Free Press Journal, the price of tomatoes in Bhopal, the capital of Madhya Pradesh, has skyrocketed from Rs 10 per kilogram the previous week to Rs 100 per kilogram at present.
Also Read | Why tomato prices shot up to Rs 100 per kg?
Food inflation refers to the sustained increase in the prices of food items over time. It is a crucial economic indicator that reflects the affordability and accessibility of basic food products for the general population. Factors such as adverse weather conditions, supply chain disruptions, changes in global commodity prices, and government policies play a significant role in influencing food inflation.
For more details, watch the accompanying video
(Edited by : C H Unnikrishnan)
First Published: Jun 27, 2023 12:41 PM IST
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