Switch tracks now

Latest government data shows FDI into India fell by an alarming 78% in June, and by 67% year-on-year during the April-June period. Surely that should ring alarm bells. So should RBI's annual report. Despite higher interest rates and the painful trade-off in terms of their impact on growth, inflation remains sticky at around 7%. The central bank's ability to lower rates to revive growth is limited, as is the government's scope for fiscal expansion given the widening fiscal and current account deficit. 

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