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Business News/ Opinion / Elusive revival
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Elusive revival

A strong recovery for the Indian economy is still some way off

The revival in the monsoon has perhaps made the risks of a drought less acute. Photo: Hindustan TimesPremium
The revival in the monsoon has perhaps made the risks of a drought less acute. Photo: Hindustan Times

Has the Indian economy turned the corner? The past few weeks have seen a stream of positive economic news—from the easing of inflationary pressures to a pick-up in car sales to the unexpectedly strong quarterly results announced last week by Reliance Industries Ltd. The revival in the monsoon has perhaps made the risks of a drought less acute. Global crude oil prices have eased. The latest trade data has also provided reason for optimism.

However, a sustained economic recovery is a complicated task if we look at the underlying trends. The government has committed itself to fiscal compression. Inflation is still enough of a problem for the Reserve Bank of India to shy away from rate cuts. Investment activity is still weak. The global economic recovery is uneven.

A year after the run on the rupee forced policymakers to focus on economic stabilization, the economy looks less fragile. But a strong recovery is still some way off.

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Published: 21 Jul 2014, 12:36 AM IST
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