The Indian economy held out hope and inspired optimism with an 8.2 per cent growth in the first quarter, in the three months through June, despite headwinds such as spiraling crude oil prices that currently stand at over $78 a barrel and the rupee depreciating to 71.31 to a dollar as on September 4. The surge is a two-year high and gives the government the device to parade an economic rebound before general elections next year. But aside the drum beat of praise one may well ask if the economy is really recharged? Is the uncertainty of policy changes—demonetisation in 2016 and the goods and services tax (GST) the following year— a thing of the past?
The response is mixed, divided. At one end are experts, like Raghav Gaiha of the University of Pennsylvania, who believes it is “over-optimistic” to think the Indian economy is out of the woods and to assert a big turnaround is largely mistaken, if not illusory. “I remain highly sceptical of the official GDP growth trajectory that rests on a methodology that is not fully transparent and lacks...
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