India’s Growth Slows More Than Estimated, Adding Pressure on RBI

India’s economy slowed more than estimated, adding pressure on incoming central bank governor Urjit Patel to cut interest rates and stimulate investment.

India still retains its spot as the world’s fastest-growing big economy, and the outlook has brightened after Prime Minister Narendra Modi in August broke a parliamentary logjam and paved the way for a landmark national sales tax. Consumption is forecast to increase following a pay hike for federal employees and a revival in the July-September monsoon rains that are key to rural incomes. The risk, however, is that rampant purchasing can stoke inflation -- already higher than the central bank’s target -- if sluggish investment damps supplies of goods and services.