Stalled demand, sluggish growth

There is no crisis in the Indian economy, but structural drivers of growth must be reinvented

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Markets got the September quarter GDP number wrong when it came in at 5.4% instead of the widely expected 6.5%. But they were mostly right about the outcome of the Monetary Policy Committee (MPC) meeting which ended on Friday. RBI has kept interest rates unchanged as expected and also accepted that it was unwarrantedly bullish about growth. The annual growth forecast for 2024-25 has now been brought down to 6.6% instead of 7.2% in the October resolution of MPC. What is noteworthy is that Friday's downward revision to growth is not just on account of a subpar performance in the September quarter. Growth forecasts for quarters ending December 2024 and March 2025 now stand at 6.8% and 7.2%, respectively, instead of the 7.4% for both these quarters in the October resolution.