Put differently, when the Indian authorities said they would bring the fiscal deficit below 5.3% last year, no one believed them. The final outturn was 4.9%. Similarly, while we project the CAD to come down to 3.7% this year, I think we could be pleasantly surprised.
Not all the actions we have taken are pretty, and not all are sustainable, but they have done the job. Indeed, despite its shortcomings, India’s GDP will probably grow by 5–5.5% this year – not great, but certainly not bad for what is likely to be a low point in economic performance.