As we write this article, there are two developments that need careful investigation. One, GDP growth in the second quarter coming in much higher than expected, and its implications for the full-year estimates, against a near zero inflation print. And two, the domestic currency falling beyond the psychological barrier of 90 against the dollar.

The GDP data has reinforced the structural resilience of the domestic economy, which has benefitted from the sustainable pace of reforms that have facilitated formalisation and the ease of business with a digital-first approach. Rural demand has not shown signs of ebbing, and urban demand seems to be getting its mojo back with plateauing inflation and formalisation underpinning jobs. The booster shot from GST rate rationalisation is helping in the revival of animal spirits, with capacity utilisation of manufacturing firms hovering around 80 per cent.

In the second quarter, the services sector notched up impressive growth, led by the financial, real estate and professional services segment, while industrial activity received a boost from manufacturing and construction. With a real GDP growth of........

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