Modest growth raises concerns about sustainability of market rallies

Next time the GDP numbers are announced, the slowdown could be attributed to global economic weakness, rising oil prices, or another drop in domestic capex

In early November, I wrote a piece suggesting that the Indian economy was functioning as expected: Muddling along. It rarely falls into a full-blown recession but it also struggles to achieve sustained acceleration. This observation was immediately illustrated when India’s GDP (gross domestic product) growth, after reaching 8.2 per cent in FY24, fell to 6.6 per cent in Q1 (the first quarter) of FY25 and then further to 5.4 per cent in Q2. Growth is unlikely to return to 8 per cent anytime soon, but it also seems unlikely to dip below 5 per cent. If the original “Hindu rate