December 29, 2025

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ON A ROAR HOW TO SUSTAIN THE UPSURGE

WHEN THE GDP NUMBERS FOR THE SECOND quarter of the current fiscal came in December-end, economists were pleasantly surprised. Growth had risen to 8.2 per cent, higher than the 7.2 per cent in Q1, and much higher than the 7 per cent the Reserve Bank of India (RBI) had anticipated. This brought to the fore a key question: has the economy finally shaken off the inertia dogging it since the pre-COVID days? More importantly, can this growth be sustained, and can it rejuvenate private investment and bring in the jobs that the country badly needs? There are no easy answers. The higher GDP in Q2 was not just because of an uptick in corporate performance that aided manufacturing and services, but also because it came on a low base of 5.6 per cent. The numbers were also aided by the use of a very low GDP deflator of 0.5 per cent. A `deflator' is used to convert nominal GDP (everything produced in an economy at current prices, unadjusted for inflation) into real GDP to accurately reflect changes in actual production, not just price increasesBut there are other factors that point towards a robust phase for the economy. One is low inflation, which rested in the lower range of the RBI's target band of 2-4 per cent for several months in a row (aided by low food inflation and benign crude prices). The other is a rebound in consumption, helped by a tweak in the Goods and Services Tax (GST) slabs that brought down taxes on 90 per cent of essential goods, and income tax reforms. The new GST slabs kicked in only in late September, so its full impact will reflect in Q3FY26. The Indian economy has entered what RBI governor Sanjay Malhotra calls "a rare Goldilocks period" marked by a high phase of growth and low inflation (see interview).

A NEW ENEMY AT THE GATE

Rajneesh Ghai grew up in the quaint little town of Wellington in Tamil Nadu listening to stories of inspiring battles from his father, Lieutenant Colonel L.T. Ghai. One tale particularly, from the 1962 IndoSino War, blew him away. It recounted the heroics of the 13th battalion of the Kumaon regiment in which 120 soldiers, led by Major Shaitaan Singh, faced 3,000 Chinese soldiers and killed more than a third. It came to be known as the Battle of Rezang La, part of a war in which India lost lives, territory and morale, but demonstrated the valour of its jawans. 120 Bahadur, the recent David-vs-Goliathesque film starring Farhan Akhtar as Major Singh, is the result of Ghai's lifelong fascination. "The sacrifice and bravery of these men," says Ghai, director of the film, "was such that I felt it had to be told to the country." His brother, Lieutenant General Rajiv Ghai, Director General of Military Operations, gave him an elaborate account of the battle, which he supplemented with two years of research that included interviews with surviving soldiers Ram Chandar Singh and Nihal Singh