What will it take to sustain the recovery?

A return to a high growth path will not happen on account of market forces alone.

Four factors will have a crucial bearing on India’s growth prospects and determine macroeconomic policy in the near future.

First, the strength of the ongoing recovery. Secondly, the potential for disruption in the latest strain of the coronavirus, Omicron. Thirdly, the size of the fiscal deficit in FY 2021-22. Fourthly, the appointment of Jerome Powell to a second term as the chairman of the US Federal Reserve.

India’s gross domestic product (GDP) growth of 8.4 per cent in the second quarter of the current year is broadly in line with expectations.  On this basis, the economy should meet the Reserve