Policy challenges with 5 per cent growth

Since the scope of supporting growth through fiscal and monetary policy is fairly limited, economic revival will ultimately depend on policy reforms

The Indian economy, according to the first advance estimates of gross domestic product (GDP) for the current financial year, is expected to expand by 5 per cent, compared with 6.8 per cent last year. The nominal growth is likely to slip to 7.5 per cent, compared with the assumption of 12 per cent in the July Budget. The decline in growth can lead to a variety of problems, particularly in managing corporate and government finances. While growth estimates did not surprise anyone, the big question is: How fast can India return to a higher growth path? Therefore, in the given