India's GDP growth for Q2 has declined to 5.4%, the lowest rate in seven quarters, due to a significant contraction in mining and lackluster performance in manufacturing and utility services.

Economists stress the need for the Government of India to increase spending in order to stimulate demand and reverse this trend. Infrastructure investment is seen as a crucial factor for medium-term growth, particularly given the weak global economic conditions. The Centre's capital expenditure and that of consolidated states have both experienced declines of 15% and 11%, respectively, in the first half of the financial year.

Experts, including DK Srivastava from EY India, urge policymakers to take a more aggressive approach to prevent excessive slippage in budgeted investment spending.