March 11, 2019

The mounting challenges of a two-speed Indian economy

Research Director and Senior Fellow Niranjan Rajadhyaksha writes in Mint on the challenges of managing India's two-speed economy.


"The sectoral growth rates tell us how the Indian private sector is growing at two speeds right now—one for agriculture and one for the other parts. In fact, one important reason why the overall economic momentum has slowed is because of an indifferent rabi season this winter in farms across the country.


Output growth at constant prices in agriculture, forestry and fishing has nearly halved compared to the third quarter of fiscal 2018. The picture becomes sharper when you add prices. Nominal farm output—production plus inflation—has grown at a mere 2% in the third quarter, as the collapse in farm gate prices has added to the pain of a poor rabi season. Farm incomes are now growing at perhaps the slowest pace in the past 15 years."


Read the full article here.

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