India’s quarterly estimates of Gross Domestic Product (GDP) growth rate have projected the Q3 GDP estimates at 7 percent. India remains one of the fastest growing emerging market economies driven by key structural reforms, normal monsoon and reduced external vulnerabilities. “Inflation has declined from 6 percent in July 2016 to 3.4 percent in December 2016. The Government has continued to adopt the path of fiscal consolidation and the Reserve Bank of India has maintained an accommodative monetary stance.” The current account deficit remains manageable and international reserves standing at US$360 Billion are at their highest levels. External vulnerabilities remain subdued. It also appears that the post-November 8, 2016 decision to withdraw the legal tender character of all Rs. 500 and Rs. 1000 notes and the re-monetization initiative has not undermined the growth momentum.
“India remains one of the fastest growing emerging market economies driven by key structural reforms, normal monsoon and reduced external vulnerabilities. The Q3 GDP estimates of 7 percent growth indicate that the key domestic risk of demonetization has not undermined the growth momentum and growth prospects for 2019-20 remain bright. The article seeks to examine the key reform measures undertaken by Government of India to maintain the growth momentum.”
Astute food management and price monitoring by the Government has helped to contain inflation. A number of measures have been taken by Government to control inflation and restore price stability. The steps taken include increased allocations for the price stabilization fund, creation of buffer stock of pulses, announcement of higher MSPs to incentivize production, imposition of export duties and reduction of import duties on certain commodities.