Modi's worst growth year puts pressure on Budget 2018 to spur economy

Public spending is crucial because private investments have been weak

India forecast its economy will expand at the slowest pace since Prime Minister Narendra Modi came to power in 2014, piling pressure on his government to jump start activity before a national vote early next year.

Gross domestic product will grow 6.5 per cent in the year through March, the Statistics Ministry said Friday, compared with the Bloomberg consensus of 6.6 per cent as the chaotic roll out of a new sales tax hurt demand. However, with inflation zooming past the central bank’s target, there’s little room to cut interest rates. So investors may have to brace for higher government