Calibrating the policy mix

The right fiscal-monetary-external balance must be achieved to nurture and harness a nascent recovery

After a challenging few months, first light is emerging at the end of the growth tunnel. The recent high frequency data — whether power demand, cargo and railway traffic, industrial production, or the Purchasing Manager Index surveys — are either showing signs of stabilisation or some lift on a sequential (month-on-month) basis. But this will not show up any time soon in the year-on-year data, which is far more sluggish and doesn’t capture turning points well. 

Year-on-year growth in the October-December quarter is tracking 4.5 per cent — the same as last quarter — and may even print a tad lower.