Monsoon boost and AI bubble worries feature in RBI outlook

Beyond monetary policy, the report touches on seasonal and technological factors influencing the Indian economy. July experienced above‑normal rainfall, reducing the overall deficit to 13% and keeping reservoir levels near normal. Kharif sowing was only 4.7% lower than the previous year, providing support to rural demand. On the technology front, SBI Research warns that massive speculative investment in artificial intelligence (AI) infrastructure could create an AI bubble, as firms pour capital into the sector beyond realistic needs.