But consumer demand is being led by a small pocket of affluence. The 6.5% growth in gross domestic product that the government is penciling in for the fiscal year that began this month faces several risks. Turmoil in the US banking industry is making India’s $245 billion software-export industry gloomy. A sustained rise in oil prices, currently kept in check by global growth concerns, would crimp already-limited purchasing power of urban low- and middle-income workers amid high unemployment. Meanwhile, climate change could dash any hope of a recovery in stagnant real wages in rural areas. Summer temperatures are above normal by about 5 degrees Celsius (41 degrees Fahrenheit) in many parts of the country. Heat waves could damage crops and cause power shortages.
Disclaimer: This is a Bloomberg Opinion piece, and these are the personal opinions of the writer. They do not reflect the views of www.business-standard.com or the Business Standard newspaper
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