Lifting the ‘trend’ rate of growth4 min read . Updated: 22 Jul 2016, 04:24 AM IST
It is important that the gains made on the fiscal and monetary fronts over the past two years are not reversed
The policy initiatives of the Narendra Modi government so far have largely focused on repair and reform of ecosystems and improving the macroeconomic fundamentals. If the momentum on these improves, it will do more to raise India’s ‘trend’ or potential rate of growth—or that which does not set off inflationary fires—rather than push up cyclical growth. Global experience suggests raising the trend growth is not only arduous but happens with a lag.
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