it is prudent to be watchful about the rising intensity and scale of headwinds from the geopolitical conflict which could be overwhelming for all emes, including india. in the next meeting of the mpc in april 2022, governor ’ s statement was sombre. he termed the war in europe and its fallout as ‘ tectonic shifts ’, little realising that these words would be forerunners to descriptions of the global outlook in terms of extreme weather conditions 2. in his words, “ we are confronted with new but humungous challenges – shortages in key commodities ; fractures in the international financial architecture ; and fears of deglobalisation. extreme volatility characterises commodity and financial markets …. the conflict in europe has the potential to derail the global economy. ” in a span of two months, the projection of real gdp growth was revised downwards by 60 basis points to 7. 2 per cent for 202223 while the cpi inflation projection for the year was raised by 120 basis points to 5. 7 per cent. these adjustments to the projections can be regarded as the first authentic assessment of the toll that geopolitical spillovers are expected to take on the indian economy. by the june 2022 meeting of the mpc, it was clear that risks were materialising faster than anticipated in inflation prints, with three - fourth of the consumer price index ( cpi ) under siege. in that meeting, therefore, the inflation projection for 2022 - 23 was raised by another 100 basis points to 6. 7 per cent. the state of the economy the state of the economy article published in the rbi ’ s monthly bulletin has established its credentials as a reliable and comprehensive source of information and analysis on the indian economy. in its latest edition, it points out that domestic economic activity has been gaining traction in spite of the formidable geopolitical headwinds. gauged from high frequency indicators, the indian economy is consolidating its path of “ earthquake ” ( imf ) ; “ hurricane ” ; “ storm clouds ” ( jamie dimon, ceo, jp morgan chase ) ; “ the perfect storm of crises ” ( un secretary - general antonio guterres ) ; “ economic typhoon ” ( bank of korea ). recovery. it is heartening that contact - intensive sectors which were hit hard by the pandemic, are regaining traction. e - way bills generation and toll collections indicate a sustained momentum in trade and transport activity. the aviation sector is

the sector to avoid a decline in output. moreover, they also find that investments which raise productivity in agriculture also boost manufacturing growth, because agriculture is an important source of intermediate inputs for manufacturing. 2 uganda currently only allocates about 3. 5 percent of the government budget directly to agriculture. raising budgetary allocations to agriculture and for investment in rural areas should be a strategic priority. whether or not public spending on agriculture actually contributes to improving agricultural productivity depends on the nature of the spending. there is strong empirical evidence from around the world to indicate that the provision of public goods and services, which are defined as goods and services which because of their character cannot be supplied optimally by the market, have a large positive impact on agriculture with potentially very high social rates of return, if well designed and implemented. 3 examples of the type of public goods and services which are relevant for agricultural development in uganda include : i ) agricultural research and development, to produce improved farm technologies such as high yield seeds and to determine the optimal farm technologies for the conditions prevailing in uganda ; ii ) agricultural extension services to provide information and technical advice to farmers to adopt good agricultural practises and to use appropriate purchased inputs ; this can help farmers raise their yields ; iii ) the construction and especially the maintenance of rural feeder roads to reduce the cost of transporting agricultural produce to markets and raise farm gate prices ; in the data are from “ agriculture for inclusive growth in uganda ” inclusive growth policy note 2, world bank, 2012. lawrence bategeka and john matovu ( 2011 ), “ oil wealth and potential dutch disease effects in uganda ”, economic policy research centre. the evidence is surveyed in enrique blanco armas, camilo gomez osorio, blanca moreno dodson and dwi endah abriningrum ( 2012 ), “ agriculture public spending and growth in indonesia ”, policy research working paper 5977 world bank. bis central bankers ’ speeches terms of encouraging farmers to produce more output for their market, investment in rural feeder roads is more important than investment in main roads ; iv ) the provision of veterinary services and the control of plant diseases ; controlling animal and plant disease is an activity with very large positive externalities ; v ) the provision of market information, for example price information, to help farmers make more informed decisions about which crops to grow and to strengthen their ability to negotiate prices with traders. vi ) clarifying and strengthening land rights and the security of land tenure, to improve incentives for farmers to invest