In India, run-rates matter for the economy as much as they do in the nation’s beloved sport of cricket. To meet Prime Minister Narendra Modi’s target of turning India into a developed nation by 2047, the economy would need to hit close to 8 per cent growth every year until then. Ambition is good but to stand a chance of achieving it, India needs to match it with an equally bold agenda of economic reforms.
The world’s fastest-growing major economy is losing momentum. After impressive post-pandemic growth, India’s economic expansion has slowed for three consecutive quarters. In the current fiscal year, growth is forecast to be 6.4 per cent — which would be the country’s slowest in four years. Higher, jobs-rich growth is essential to take advantage of India’s vast young workforce.
At home, high unemployment, persistent food inflation, subdued consumer spending and weak investment are acting as a drag. Global economic conditions are also becoming less supportive. US President Donald Trump has ignited trade tensions and supply chain uncertainty. The Indian rupee recently fell to a record low against the US dollar following Trump’s global tariff threats, raising costs for importers.