Is their a silver lining somewhere?

"Is the Indian economy really that strong," wondered R Ramaswamy. The rate of investment is at its lowest level in 15 years. It is down to 30% of GDP from 34% in 2014. Growth in industrial production has risen from a low base of 2% in mid 2017 but the growth in bank lending is down sharply. Inflation is down, but that is mainly due to weakness in global commodity prices. The combined central and state fiscal deficit is high at 6.5% of GDP and our government debt is higher than other emerging market economies, at 70% of GDP. So, a 7% growth rate of our economy seems suspect. Not so, said Urjit Patel, Governor of RBI. "There are now clearer signs that the revival  in investment activity will be sustained," he said. "On the whole, real GDP growth is expected to expand at 7.4% in 2018-19, with risks evenly balanced." Capital goods output, which provides an indirect indication of investment activity in the economy, rose by 20% in February. The India Meteorological Department has forecast a normal monsoon for this year which will lead to lower food prices and lower inflation. In, what is known as "Cobweb Phenomenon", bumper crops lead to a fall in prices at wholesale markets, known as 'mandis', and lead to severe losses for farmers. That would be disaster in an election year so Prime Minister Modi has promised farmers a return of 50% over cost by increasing the Minimum Support Price. That will increase market prices of food at at time when fuel prices in India have reached their highest levels since September 2013. But, according to Nomura, Modi's promise of higher prices for farm produce will not be that profitable for farmers, but will be sufficient to increase food prices and inflation. Foreign Institutional Investors have been selling stocks because of worries about our growth prospects but have not withdrawn money from India like in the past, so the rupee has remained stable. Although Governor Patel is predicting low retail inflation, the minutes of the last meeting of the Monetary Policy Committee shows concern for higher inflation and a possibility of a higher interest rate. Bond yields jumped 60 basis points, from 7.13% to 7.73%, thus increasing cost of borrowing for the government. It is more important to reduce poverty than to concentrate on inequality, wrote Prof P Balakrishnan. Reforms in agriculture are needed for a sustained increase in income of farmers and a decrease in rural poverty. Farmers need freedom from laws that restrict their freedom to export their produce, give them direct income support and improve infrastructure to prevent wastage, wrote Prof Gulati and Saini. Then, there is the possibility of a global trade war. A real economic potpourrie.