India’s economic growth outlook remains broadly stable despite global geopolitical tensions, but economists warn that the country’s vast informal sector is facing significant, largely unmeasured pressure.
A Reuters poll of economists indicated that while headline growth figures remain resilient, the impact on small businesses and informal employment is not fully captured in official data.
India’s economy is projected to grow around 6.7 percent in the current fiscal year, reflecting steady expansion. However, analysts noted that underlying stress persists, particularly in the informal sector, which accounts for a substantial share of employment and economic activity.
Economists said disruptions linked to global tensions, including supply constraints and rising energy costs, are affecting smaller enterprises more sharply, forcing some to scale back operations or adjust business models.
Despite these pressures, inflation is expected to remain within the central bank’s target range, and interest rates are likely to stay unchanged in the near term.
However, experts cautioned that a prolonged geopolitical crisis could strain public finances, potentially diverting resources away from capital expenditure and toward subsidies, while further weighing on demand and employment.
The findings highlight a growing disconnect between India’s stable macroeconomic indicators and the realities faced by its informal economy, raising concerns about the broader sustainability of growth. (Times Kuwait)