A sharp incline

livemint.com:

ICRA projected its growth at 8.5% in the three months to 30 June, while SBI has pegged the figure at 8.3%. Both exceed the Reserve Bank of India’s 8% forecast by a respectable margin. This is encouraging, considering the uncertainties that loom globally as the Ukraine war shows no sign of ending.

We have high capital expenditure by the government to thank for keeping India’s growth going strong, as well as a healthy services sector. But a big part of it would also be due to last year’s weak quarterly reading that magnifies the June quarter’s year-on-year expansion. There are also other statistical riddles that suggest the scenario may not be as bright as it seems.

So, while a plus-8% reading is enviable, we must not let it mask the pockets of economic weakness that persist. Private investment, for one, is taking rather long to get back in form. A credit pick-up on the back of healthy balance sheets of banks and companies has been signalling an impending crowd-in of private investment, but it still lacks momentum.