India Grapples With a New Economic Downturn

Twice it experienced a downturn and twice it weathered the storm: In the years following the global financial crisis, India's economy displayed resilience as it battled challenges related to inflation, trade, consumption, investment and the deficit. But despite emerging from these downturns in 2009 and 2014 with stronger rates of growth, India's current slowdown poses a challenge to Prime Minister Narendra Modi's administration as it seeks to revive rural demand and boost credit amid a shadow banking crisis. As the government focuses on raising consumption while fending off challenges from the opposition, the economy's long-term growth prospects will depend on its success in reviving fixed investment to over 30 percent, boosting manufacturing's share of gross domestic product and promoting labor-intensive growth to achieve Modi's vision of a $5 trillion economy by 2024....