With the easing of inflation, India’s focus should be on growth

Annual CPI inflation fell to 5.88 per cent in November, from the previous month’s 6.77 per cent and below the RBI 6 per cent upper tolerance limit for the first time since December. The IIP contracted 4 per cent year-on-year in October, led by manufacturing (minus 5.6 per cent) and also the sub-sectors that are proxies for consumption and investment activity. The government, on its part, would do well to re-emphasise fiscal consolidation: Borrowing less and redirecting government expenditures from consumption to investment. With the next Union budget less than two months away, the action should shift from Mint Street to North Block. The risks to inflation may not have subsided, but concerns over growth and investment . . .