India: Why growth will not bounce back

Overview

The current exuberance about India is excessive. Even as analysts are raising their growth targets and investors are hoping for major reforms, we believe some real risks may hamper an economic revival. A sluggish global recovery, limited fiscal space for additional spending, and the lack of significant reforms mean that the upturn will be short-lived. Economic growth will remain at a lower level of around 6 per cent over the next two-three years until the structural imbalances at home...