Amid expectations of a healthy monsoon season along with pent-up demand, increased government spending, rise in service activities and improvement in mobility, it is expected that India's GDP growth rate may increase to over 7 percent during Q2FY22, according to experts. A global rating agency has, in fact, viewed that the economy's growth rate may to rise to 9.1 percent in calendar year 2022 as compared to an estimated 8 percent in 2021.

While the above figures look encouraging, inflation has emerged as a big concern. Rising prices of daily essentials like tomatoes, milk and edible oils have hampered the financial health of all, particularly the economically weaker section as well as the ordinary middle class families. Significantly, a second-round effect of high fuel prices has played a key role in pushing prices of nearly all the essential items, and this has lately been cited to impact the savings rate of the well-offs as well.

According to latest available data, however, retail inflation came down from 7.61 percent recorded in October 2020 to 4.48 percent in October this year, which is in the comfort zone of the RBI, but prices of some items of CPI as well as wholesale price inflation are still high. Also, wholesale inflation rose to 12.54 percent in October from 10.66 percent in September. Experts caution that risks of high global commodity prices should not be overlooked as well.

Meanwhile, with the impact of low base effect wearing off, industrial output grew 3.1 percent, a seven-month low, in September. This is a concern, considering which the Centre should come out with urgent measures to stimulate consumer spending and demand. At the same time, the central bank also needs to keep a close eye on these macroeconomic factors so that it can take balanced steps in its upcoming policy meetings.

I invite your opinions.