Indian policymakers must balance growth amid global energy, tech shifts

While the economy is expected to recover in the second half, growth for this full financial year will be slower than initially projected

After a blistering 8.2 per cent growth in gross domestic product (GDP) last financial year, India is now returning to its trend growth rate of 6.5-7 per cent. Some moderation was anticipated for three reasons: A lower fiscal impulse, interest rates remaining elevated for 21 months, and tighter lending norms.

 

The sharp deceleration in the second quarter of 2024-25 is a blip caused by slower-than-expected capital expenditure by central and state governments due to the prolonged elections and the impact of weather vagaries.

 

While the economy is expected to recover in the second half, growth for this full financial year