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Introduction

India’s economy showed signs of recovery last quarter, yet incoming trade risks cast a shadow over future growth prospects. With the global trade environment undergoing potential upheaval due to US President Donald Trump’s tariff threats, the situation remains precarious. Friday’s data will likely reveal a 6.2% GDP growth in the December quarter, bouncing back from a seven-quarter low of 5.4%, but still falling short of the central bank’s anticipated 6.8%.

Conservative Perspective

From a conservative viewpoint, the government’s prioritization of spending on infrastructure is seen as an effective means to stimulate growth amid global uncertainties. The conservative leaning often emphasizes fiscal stimulus and tax cuts, and the recently announced 1 trillion rupee tax cut aligns with this ideology. Moreover, the Indian government’s investment in infrastructure, including roads and highways, aids in sustaining economic momentum. Conservatives might argue that such measures are critical to buffer the economy against external trade shocks and to ensure domestic resiliency.

Liberal Perspective

The liberal perspective highlights the potential vulnerabilities in this growth trajectory, emphasizing the need for inclusive policies that boost domestic consumption sustainably. Liberals may advocate for the strengthening of social safety nets and increasing direct assistance to lower-income groups, given that weak urban consumption could hinder long-term growth. Additionally, they might critique the reliance on government spending and suggest that further interest rate cuts by the Reserve Bank of India should be accompanied by structural reforms, such as enhancing the healthcare system and investing in education to ensure equitable growth.

Conclusion

While India’s recent economic indicators present a cautiously optimistic outlook, the impending trade risks and domestic consumption challenges require continuous attention. Balancing fiscal stimulus with inclusive economic reforms could potentially pave the way for sustained growth. Policymakers face the demanding task of navigating India’s economy through this uncertain global trade landscape while striving to achieve the ambitious goal of transforming India into a developed nation by 2047.