Illustration: Suman Choudhury

India will be a trillion-dollar economy by the end of this fiscal — that is, March 2008. The economy grew by 9.4 per cent in 2006-07 and it does look as though it will grow by at least 8.5 per cent this year — making the country one of the fastest-growing economies in the world. With inflation nailed down to a low 3.5 per cent, there’s a decent chance that the country will be able to walk the fine line by ensuring growth without running the risk of a tearaway rise in prices.

But there are some worries as well: government spending continues to remain high; high crude oil prices create a climate of uncertainty on the price front; and for the first time, pensions will exceed the salary bill for government servants.

The bigger concern is whether the US economy will tip into a recession, sending shock waves through the less robust economies of the world.

The Cassandras reckon there’s a crisis lurking in the shadows, but there’s a passel of Pollyanas that believes India will ride out the storm.