Macro headwinds

Next govt will face daunting economic challenges

There are multiple indicators that India’s prolonged sojourn in a macro-economic sweet spot is coming to an end. Driven by favourable global conditions and commodity prices, the past five years have been fortunate for the Indian macro-economy. Inflation has been brought under control as a partial consequence of these global factors, and the easy availability of global capital has helped finance the current account deficit. Easy inflation and low commodity prices have flattered the fiscal deficit, allowing the government to avoid painful belt-tightening. But that is in doubt now, with the government missing its tax revenue target by 11 per