Evaluating the Indian economy's resilience

A growth trajectory of 6.5 to 7.5 %, centred around 7 %, is reasonable in the coming years, barring the eventuality of simultaneous external shocks

In view of its robust growth of 7.7 per cent during the first half of the current fiscal year, the Reserve Bank of India (RBI) has upgraded the full-year growth forecast for the Indian economy to 7 per cent. The erstwhile estimates by multilateral agencies and the private sector, which have hitherto varied between 6.3 and 6.5 per cent, are also likely to get revised soon to align more closely with the RBI’s estimate.

What explains this resilience of the Indian economy? Besides global demand for goods and services, the Indian economy is largely impacted by five key shocks: Deficient or