<div>Defying weakness in developed countries and elsewhere in emerging Asia, India's economy expanded 7 per cent in the April-through-June quarter against 6.7 per cent a year ago, on a par with rival China's growth rate.<br><br>India remained a rare bright spot in the world economy, doing better than trouble spots such as Brazil, Russia and South Africa.</div><div> </div><div>Asia's third-largest economy also continued to distinguish itself from its neighbours by being fuelled not by investments or exports but by consumer spending, which grew 7.4 per cent year-on-year. Indians are spending despite a withering of demand in other large economies, which has crushed trade and production growth around the globe.</div><div> </div><div>While doubts still persist over India's new way of calculating GDP, even though the method gained an endorsement from the World Bank's chief economist, there is no denying the fact that the economy is still struggling to gather steam.</div><div> </div><div>"Overall the message is that growth is still weak," Prasanna Ananthasubramanian, chief economist at ICICI Securities Primary Dealership, told <em>Bloomberg</em>.</div><div> </div><div>As China's economy stumbles, Union finance minister Arun Jaitley portrayed India as a new engine to power the world economy, while Niti Aayog chairman Arvind Panagariya said the scope for India to capture export markets from China was "potentially huge".</div><div> </div><div>Not all are taking India's rosy recent output data at face value, however. Quite a few columnists and media commentators are of the view that the latest figures indicated the Narendra Modi-led National Democratic Alliance (NDA) government's attempts to revive Asia's third largest economy were faltering. </div><div> </div><div>In May 2014, Narendra Modi swept to power on an assurance to reform and revive the economy to help provide millions of jobs for the burgeoning population of young adults. But many of Modi's key economic programmes including the goods and services tax (GST) have stalled in the Rajya Sabha where the NDA lacks a majority.</div><div> </div><div>But just 15 months after that grand electoral victory, disenchantment has set in. Businesses as well as young Indians are getting restless with slow progress on the ground.</div><div> </div><div>On Sunday, Modi also announced he was abandoning land reforms aimed at speeding up stalled multi-billion dollar infrastructure and other development projects, after the Congress vehemently opposed it in Parliament.</div><div> </div><div>Economist Ashoka Mody, in a blog for Bruegel, a European think-tank, is more sarcastic, criticising Indian official statisticians for controversial data that have "created the dangerous illusion that Indian GDP is growing rapidly when all indicators point to the contrary".</div><div> </div><div>The prolonged slump in corporate earnings would make it tougher the government to hold to its plan to accelerate economic growth to over 8 per cent in the fiscal year ending March 2016. The collective net profit of 80 Indian companies, each with a market value of more than $100 million, fell 8 per cent in the April-June quarter, year-on-year, according to <em>Thomson Reuters </em>data.</div><div> </div><div>Mody adds: "The illusion that India actually benefits from the recent turmoil - because, for example, oil prices are low - ignores that fact that prices are low because the global economy is so weak. The pervasive global weakness ultimately does the greater harm, especially because India is not competitive."</div><div> </div><div>"India can't be the jewel in the crown simply because China is doing poorly," Rajeev Malik, senior economist at broker CLSA, told the <em>Financial Times</em>. "Given the huge differences in per capita GDP, India will be growing faster than China. But that should not be confused to mean that India's clout all of sudden is going to be greater than China's."</div><div> </div><div>In the present economic scenario, India does indeed enjoy occasions arising from China's woes and the external economic condition, but will not be able to take advantage of them unless it quickly tackles its own domestic challenges.</div>
