Growth is likely to have peaked in the first quarter and may face headwinds with monsoon as the biggest risk for domestic demand. Investments may be difficult to sustain towards the end of the year as the election calendar heats up and the government's fiscal trade-offs increase
Besides the low base factor due to Covid-led hit earlier, what also led to the growth was private consumption or capital expenditure and increase in services on the supply side. Image: Punit Paranjpe / AFP
India accelerated to fast-paced growth in the June-ended quarter, but the economy may still be headed for a slugfest in the second half of the financial year as monsoon plays truant, creating higher food inflation, while government-led spending takes a backseat amid declining exports. What is concerning is if the world’s fastest-growing economy will show its resilience as the country enters election mode in 2024.