Economic outlook for 2009/10

Marking a distinct break from the past the economy grew at an average of 8.5 per cent and the per capita GDP at 6.9 per cent in the five-year period from 2004/05 to 2008/09, despite the crisis-affected year of 2008/09. The Indian economy weathered the financial turbulence well and grew at 6.7 per cent in 2008/09, which despite being 2 per cent lower than the average of the preceding three years, was still of a lower order than in most of the world. This achievement belongs to the common Indian citizen with credit being shared by the policy maker. The rapid adjustments in the monetary and fiscal policies were well calibrated and not excessive, enabling the Indian government to contemplate a return to fiscal consolidation in 2010/11 and an early normalisation of the monetary policy stance.

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