India will face especially complex policy challenges next fiscal year
Fiscal correction will be harder with slower nominal growth while a private investment upturn may pose an external strain
The Indian economy has come out of the pandemic in far better shape than most other large economies as well as some of our neighbours. Growth is higher, inflation is lower and debt levels are more manageable. Most of the high-frequency data for December points to a broad-based recovery in economic activity. India has also managed to avoid the crises that have hit countries such as Sri Lanka or Pakistan.