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The data on GDP growth has been dismal in Q2. Does market reaction reflect this?
Markets are forward looking. This is a data for the last quarter. Markets are looking at the next several quarters and years. We are going to reap the benefits of all the structural reforms that have happened over the last few years over a longer period. Also, because of the slowdown, we have seen much deeper reforms recently. For example, the corporate tax cut, the strategic divestment and many more are likely to come. Markets are feeling positive about that while the GDP data was not as good as anybody would have thought a few quarters back. But let us look forward.
As I said, markets are forward looking. While the growth has slowed down, everybody knows that India has a huge potential. With a $2,000 per capita income, we cannot be too negative on consumption. Private capex could start soon. The corporate tax cut is likely to give a boost. FDI flows have been increasing. There are a few challenges in the financial sector, real estate and autos. But I am sure, the government is looking at all of them and trying to address those concerns.
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