Beyond GDP Growth: Is India Entering an Age of Capability Building?
Reading between the GDP lines India’s economy has just produced a number that has resulted in a by-now familiar round of cautious celebration. Real GDP grew by 7.8% in the first quarter of FY27, comfortably above expectations. Private consumption remained strong, while gross fixed capital formation grew by 11.9%. Manufacturing, construction, and services also recorded healthy expansion. For an economy navigating difficult global environments, the number is reassuring: the domestic growth engine appears to have considerable momentum. Yet a GDP growth number, however impressive, is only the beginning of the story. The first instinct is naturally to ask whether this pace of growth can continue. Economists examine consumption, investment, exports, inflation, interest rates, and global conditions to estimate what the next few quarters might look like. Investors will look at earnings and capital flows. Policy-makers will look at whether the momentum is broad enough to withstand external...