CONTEXT:

• The Indian economy has lost its spot as the world’s fastest-growing economy to China.
• A Reuters survey of economists said that India registered 6.3% annual growth in the January-March quarter, its slowest pace in six quarters. China recorded a growth of 6.4% in the March Quarter.
• Indicators like automobile sales, rail freight, petroleum product consumption, domestic air traffic, and imports registered a slowdown in domestic consumption.
• ICRA, a rating agency notified that Indian corporate earnings registered a growth of 10.7% during the January-March quarter, it was a six-quarter low growth.
• As per economists, the prolonged phase of slower growth was due to stagnant rural wages, rising real interest costs for manufacturers and reluctance to lend among banks and non-bank finance firms due to high defaults.
• Retail inflation for the past 6 months was below 3%.