“The gross domestic product (GDP) growth is projected at 7.8 per cent for the next fiscal, with risks like Fed-rate tilting to the downside. The risk factor associated with Covid-19 has now shifted to geopolitics, crude oil and interest rate hikes in the US.” That’s the view of Dharmakirti Joshi, chief economist at analyist firm CRISIL Ltd. However, “government-initiated infrastructure-investment-led growth is expected to lift the lid off risks to an extent,” he told media at CRISIL’s recent India Outlook webinar.
Infrastructure-investment-led growth could gradually filter to smaller companies and lower income categories and, consequently, have a mild positive impact on private consumption in the near term. The forex (foreign exchange) cover seems to provide some sort of buffer for some shocks or unprepared incidents. “On the demand side, the biggest one is private consumption and it is the slowest to recover. But the fact that the infrastructure plan...