Island of stability. For now.

"The Reserve Bank of India (RBI) raised the key policy interest rate by half a percentage point as expected to bring down the 'unacceptably high' inflation and stuck to the path of withdrawal of accommodation in monetary policy as growth momentum is accelerating." ET. "Growth projections for the first quarter of the ongoing fiscal (1 April - 30 June 2022) have been retained at 16.2%, 6.2% for Q2, 4.1% for Q3 and 4% for Q4, with risks broadly balanced, Governor Das said." Consumer Price Index (CPI) inflation has been retained at 6.7% for the year. The growth figures are in comparison to the GDP in the same periods in 2021-22, which were in comparison to 2020-21. "India's gross domestic product (GDP) contracted 23.9 percent in the first quarter of financial year 2020-21, lowest in 24 years, according to government data." BT. "In the first quarter of 2021-22, the economic growth had been a stupendous 20.1 percent, which however was mainly due to the low base effect." NDTV. Having contracted by 23.9% in the previous year a growth of 20.1% meant that the GDP was still in negative territory. Which means a growth of 16.2% in the first quarter of this financial year is also because of base effect. The rate of growth last year tapered sharply to 8.4% in Q2, 5.4% in Q3 and to 4.1% in Q4. Just as it is tapering down to 6.2% in Q2, 4.1% in Q3 and just 4% in Q4 this year. "A lot of this growth is jobless growth," said Prof Raghuram Rajan. "Jobs are essentially Task One for the economy. We don't need everybody to be a software programmer or consultant but we need decent jobs." "Some estimates say we need to create 90 million jobs by 2030 to absorb new entrants to the workforce." Mint. "What options do workers who leave farms have? In the absence of a robust manufacturing sector, the answer is not more productive factory jobs that pay better and foster a virtuous cycle of value generation and demand. Instead, those who move out of farming mostly find themselves in low-paying construction work and informal services." India's exports fell to $35.24 billion in July 2022, 0.76% lower than $35.51 billion in July 2021, but merchandise imports came in at $66.26 billion, giving a record trade deficit of $31 billion. News18. "India's strong export performance in 2021 benefited from once-in-a-century surge in US demand," wrote Rahul Jacob. "While it is true that having a dynamic services export sector and foreign portfolio flows have frequently put upward pressure on the rupee, the RBI's currency management in recent months appears to overlook the boon a weaker rupee would be for exporters." Lower exports leads to higher trade deficit, which results in higher current account deficit (CAD). "At a time when inflation is already very high, a widening trade deficit and widening current account deficit means a weaker rupee and further pressure on inflation," said Mythili Bhusnurmath. "In an ocean of high turbulence and uncertainty, (the) Indian economy is an island of macroeconomic and financial stability," said RBI Governor Shaktikanta Das. Self-congratulation is risky business. Even if the risk is borne by us.