Abstract
Indian economy is in a transition phase. After
years of slowing growth coupled with rising
fiscal deficiate and governments indebtedness
the country witness a crises like situation in
August 2013 when the rupee crashed and the
soverign credit rating was on the verge of loosing
its investment grade. It was no wonder that
experts drew parellels with 1991. The change in
the political scenario and policy making in 2014
was the key to pull the country out of immediate
danger. This change in direction created a
sence of celebrationparticullary on the Dalal
street, which although typical, was somewhat
premature. There is no doubt the economy has
changed direction, but a number of hurdles
including an unsupportive global economy and
a weak monsoon have slowed down the process.
The transition phase for the economy is likely to
be longer than earlier anticipated.
Key words : Inflation, Fiscal deficit
- Introduction
Indian economy’s transition from a slowdown to
high growth is proving to be a longer and harder
journey than earlier envisaged due to numerous
factors. The slowing down global growth isn’t
helping, domestic reforms are taking time to
fructify, the jammed up investment cycle is yet
to pick up and challenges in agriculture have
hampered rural consumption. The quick gains
the economy made in last 18 months were
mainly on account of favourable global trends
including a sharp drop in commodity prices,
particularly crude oil, and near zero interest rates
in the major economies such as US, Japan and
Germany.