Amidst the flood of commentary that followed the finding that the world’s fastest-growing large economy had become its fastest-shrinking one, an observation that stood out was that India’s growth potential had dropped from 6 per cent to 5 per cent. Now, it has been obvious for some time that India will emerge from the Covid-19 recession with a record fiscal deficit, record public debt (both in relation to GDP), a fresh lease of life for the “twin-balance sheet crisis” confronting banks and companies, complex monetary challenges, and consequently reduced growth potential — once reckoned at 7-plus per cent. But 5
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