According to the monthly report by the finance ministry, the outlook for the Indian economy is good, underpinned by a stable external sector, positive agricultural outlook, expected improvements in demand supported by the festive season, and the likelihood of an increase in Government spending, which will boost investment activity. However, at the margin, demand conditions in the economy bear watching. Given the overall subdued inflation, barring a few food items, the real price of money may have gone up. The finance ministry maintain that the Indian economy will grow between 6.5 and 7.0 per cent in the current fiscal year. However, risks stem from global factors such as geopolitical conflicts, rising geo-economic fragmentation, uncertainties about the trade policies of major economies and consequent financial market reactions, the report noted.
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