Smartly, though, the government resisted frantic lobbying from some of India’s most powerful companies. Instead of handing out a big tax break, the new measures addressed some of the regularity fuzziness that might have been suppressing demand for new cars.
India’s economic numbers have for some time looked better than the facts warranted, feeding an overconfidence in New Delhi about the country’s prospects. Thankfully, that’s begun to change. The Reserve Bank of India, the International Monetary Fund, investment banks and ratings agencies have all recently cut their estimates of 2019 growth sharply. While some believe India’s official statistics may overstate growth by as much as 2.5 percentage points, even government statisticians are expected to release this week a more sober estimate for GDP growth between January and March of around 5.8%.
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The best news is that Prime Minister Narendra Modi’s government, which has loudly touted its stewardship of the Indian economy, appears to have woken up to the scale of the problem. Many would argue that the slew of administrative and tax changes that Finance Minister Nirmala Sitharaman announced as stimulus measures last Friday weren’t bold enough. But that misses the key point: Sitharaman and her ministry at last seem to be willing to take criticism on board and to adopt a more realistic view of India’s economic position. That’s the first step toward fixing the economy.
Source: Financial Express
