After having enjoyed the green shoots-led rally since early March, we may witness some drought in the form of slight softening in the market. Agri output is set to take a beating with the rain Gods not showering its blessings in several districts. The Centre has put the number at 161 districts. This will only aggravate the problems facing the UPA. Food prices are already hitting the roof. Given that festivals are round the corner and the low base effect too will start waning soon, tackling inflation will assume top priority.
Don’t be surprised if the Centre unleashes few more measures to reign in inflation. At the same time, it has the uphill task of bolstering growth. The global economic recovery is still fragile and with the monsoon shortfall it will take some doing to attain 6.5-7% GDP growth.
