Indian Economy: Both overheated and lacking heat

On the day the finance minister presented the Budget in Parliament, it was also reported that GDP growth for October-December 2012 grew at 4.5%, its lowest in a decade. It is now likely that growth for the full fiscal year will come in around 5% or lower, way below the 9% growth that many felt had become the ‘new normal’. At the same time, consumer price rise by most measures has been in double-digits for over a year, and in fact rose a lot last year while GDP growth fell.

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