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Mihir Sharma

India’s Economy Is Stuck Just Short of Escape Velocity

Something crucial is still missing in the country’s policy mix: a proper understanding of what investors really need.

Capacity utilization in Indian factories is up. 

Capacity utilization in Indian factories is up. 

Photographer: Anindito Mukerjee/Bloomberg

India’s official statisticians reported 13.5% growth in the April to June quarter of this year. This meant that the country whooshed into top place as the world’s fastest-growing large economy — and, incidentally, replaced Great Britain as the world’s fifth-biggest economy.

Unfortunately, that’s where the good news about India’s growth prospects ends. Those GDP numbers were actually a disappointment, given that the same quarter last year saw India shut down amid its devastating Delta-driven Covid wave; a Bloomberg survey of economists expected growth in excess of 15%.