New Delhi, Jan. 13 -- The first estimates of Indian economic growth during the ongoing financial year were released on 7 January. They have provided reasons for cheer as well as concern. The cheer comes from the fact that the economy is expected to grow in real terms at a brisk 7.4% despite a difficult international situation.

The concern comes from the fact that the growth in nominal gross domestic product (GDP) is likely to be a tepid 8%, the lowest rate since the financial year ended 31 March 2003.

The slim difference of 0.6 percentage points between these two measures of economic momentum is explained by a collapse in the GDP deflator, a measure of inflation used by government statisticians to squeeze out the effect of price increas...