Indias Economy Slows Down Just When It Was Supposed to Speed Up

A year ago, India was bouncing back from a recession caused by Covid-19 with a spring in its step.The country had overtaken China as the most populous country, and its leaders were declaring India the world’s fastest-growing major economy.This was music to the ears of foreign investors, and to India’s prime minister, Narendra Modi, who at every opportunity boasted about his country’s inevitable rise.

Home to 1.4 billion people, an invigorated India could become an economic workhorse to power the rest of the world, which is stumbling through the fog of trade wars, China’s troubles and Russia’s invasion of Ukraine.India displaced Britain in 2022 as the world’s fifth-biggest economy, and by next year it is expected to push aside Germany in fourth spot.But India has lost a step, revealing its vulnerabilities even as it moves up the global rankings.The stock market, which soared for years, has just erased the past six months of gains.

The currency, the rupee, is falling fast against the dollar, making homegrown earnings look smaller on the global stage.India’s new middle class, whose wealth surged like never before after the pandemic, is wondering where it went wrong.

Mr.Modi will have to adjust his promises.November brought the first nasty shock, when national statistics revealed that the economy’s annual growth had slowed to 5.4 percent over the summer.

Last fiscal year, which ran from April through March, was clocked at 8.2 percent growth, enough to double the economy’s size in a decade.The revised outlook for the current fiscal year is 6.4 percent....