Rational expectations: Downside risks to growth are increasing

The economy's resilience will be tested in the second half of the year and beyond

At a time when growth forecasts are being revised downwards in most parts of the world, the Union government seems confident about India’s prospects. The latest monthly report by the Ministry of Finance, for instance, argued that while slowing growth and higher inflation are affecting major economies, growth in India has been robust and inflation is under control. Further, in an interview with this newspaper, Chief Economic Advisor V Anantha Nageswaran noted the government is of the view that India will grow between 7.2 and 7.4 per cent in the current fiscal year. He further added that, on balance, the