Animal spirits: A revival will ease our fiscal path

India's GDP growth is doing alright but we need private capital expenditure to boom and consumption to strengthen all across for a fiscal glide-down that could boost the economy

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Outwardly, India’s April-June gross domestic product (GDP) data has the markings of a standout performance. The 7.8% year-on-year expansion last quarter makes ours the world’s fastest-growing big economy; it’s a pace we would be proud of even in better times. But strip that number of statistical aberrations, and we see a picture that cannot mask concerns over our economic strategy. The first quarter’s growth for 2023-24 lagged the Reserve Bank of India’s (RBI) 8% estimate as well as that of private economists, some of whom had forecast figures as high as 8.5%. The covid lockdown’s shrunken base three years ago has given us magnified Q1 readings, an effect that’s losing force but is yet to wear off. Details of Q1 data bear clues of how well our big state-led heave out of a pre-pandemic slump is doing. Sector wise, growth was still too uneven, with services and construction doing the heavy lifting, while farming, utilities and factories did modestly. RBI expects this fiscal year to log 6.5% in annual growth, a dip from 2022-23 a