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Silver linings

LiveMint logoLiveMint 11-06-2014 Livemint

There have been stray bits of positive economic news in recent days.

The latest trade data suggests that domestic demand is inching up. Inflation expectations of Indian households seem to be stabilizing. Growth in rural wages continues to decelerate. And there are signs that business confidence has been improving since the election results were announced.

It is clearly too early to conclude that the Indian economy has turned the corner. It continues to battle monumental challenges. The key to a sustainable rebound is a smart recovery in the private sector investment cycle—and that will depend on what the new government does in terms of policy stability, administrative clarity and fiscal policy.

The economic forecasts released by the World Bank this week show that India is likely to see the smartest recovery among emerging markets over the next three years.

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