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Opinion
Andy Mukherjee

Worst Economy in 42 Years Needs an Honest Look

India can’t fix its public finances without a frank assessment of the broken tax system.

India’s goods and service tax is poorly designed and expensive for small businesses.

India’s goods and service tax is poorly designed and expensive for small businesses.

Photographer: CHANDAN KHANNA/AFP/Getty Images

India’s economy hasn’t been this bad in 42 years. Pulling it back from the abyss will require more honesty than imagination.

Tuesday’s advance estimates for the financial year ending on March 31 peg the economy’s inflation-adjusted growth rate at 5%, a third year of slowdown. And even this figure could be optimistic. Consumer demand is in the doldrums and government spending — the only thing supporting growth — is bound to be pruned in the closing months of the fiscal year to avoid a budget blowout.