A slowdown defined much of India’s 2019. And as the numbers were actualised, it was a relatively difficult process both for policy makers and investors to digest some of the data.
If the first six months of the year were about the government admitting there was indeed a slowdown, the last three have been marked by addressing some of the contributing factors, primarily through monetary policy. These tactics, along with some more headline-worthy initiatives, such as the potential public listing of the state-owned Life Insurance Corporation of India, could move the needle. But execution is key, and it's still too early to know how some of these tactics are going to play through, whether from a growth or an investment perspective.
Lower corporate taxes have helped steady the downward turn, and we do expect growth to rise. However, our baseline scenario is that growth recovers to somewhere around 5.6% by the end of 2020, barring a major COVID-19 pandemic afflicting the country. In the absence of more substantive, systemic changes, domestically and stabilisation globally, we do not see the days of 7.5% growth rates returning any time soon; the government does not have a magic wand that can immediately restore robust growth.