Robust growth is good but India is up against more pressing challenges in need of policy action
In this backdrop, sustaining growth while ensuring macroeconomic stability will be a tough task for policymakers, especially amid the uncertainty the war and El Niño have caused. Since much of the present inflationary pressure is driven by fuel and food prices, monetary policy measures are unlikely to be effective. Rising inflation will, thus, combine with weak income growth to slow India’s economic expansion.
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