Sustainable recovery: The policy challenge is to increase trend growth

In recent years, government capital expenditure has been a key driver of growth and is likely to continue playing this role in the foreseeable future

The gross domestic product (GDP) estimate for the third quarter this financial year, released last week, will ease some near-term policy pressure. The data from the Ministry of Statistics and Programme Implementation showed the Indian economy expanded by 6.2 per cent in the October-December (2024) quarter, reversing the growth-rate decline over the past couple of quarters. Along with the quarterly national accounts data, the government released the second advance estimates (SAE) for this financial year, the first revised estimates for 2023-24, and the final estimates for 2022-23. The SAE projected a GDP growth rate of 6.5 for this financial year,