Preview

India, Macroeconomic Situation

Satisfactory Essays
Open Document
Open Document
576 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
India, Macroeconomic Situation
Reserve Bank of India

India - Macroeconomic Situation Assessment and Prospects
Indian Merchants’ Chamber Mumbai
June 19, 2012
Dr. Duvvuri Subbarao Governor Reserve Bank of India

1

India Macroeconomic Situation
Cause for Concern?

2

India - Macroeconomic Situation
Trends in Growth Rate
Long-Term Trend
10.0 9.0 8.0 7.0 6.2 Per cent 8.5 5.6 8.0 Percent 7.5 7.0 6.5 6.0 5.5 5.0 6.5 8.7 7.5 10.0 9.5 9.6

Recent Trend

9.0

6.0
5.0 4.0 3.0 2.0 1.0 0.0

3

India Growth Story
What drove India’s growth in the pre-crisis period and what explains the current moderation?

4

What is the inflation story?
Year-on-Year Inflation Rates
11

9

7 per cent

5

3

1

-2 Oct/09 Oct/10 Apr/10 Apr/11 Oct/11 Apr/12 Jan/10 Jan/11 Jan/12 Jul/10 Jul/11

WPI - Headline

WPI- Non-food Manufactured Products

5

Moderation in WPI not transmitted to CPI
Year-on-Year Inflation Rates
11

10

per cent

9

8

7

6
Jan/12 Mar/12 Feb/12 May/12 Apr/12

WPI - Headline

CPI (New)- Combined

6

What is driving Inflation?
• Food (structural) • Fiscal deficit • Demand pressures • Commodity prices + depreciation
7

What has RBI done to control inflation?

8

Has RBI succeeded in controlling inflation?

9

Has RBI’s tight monetary policy hurt growth?

10

Is it the high interest rate that is inhibiting investment?
Real Weighted Average Lending Rate (Per cent)
9 8 7 6 5 4 3 2 1 0 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 18 16 14 12 10 8 6 4 2 0

Growth in Private Fixed Capital Formation (Right Scale)

Real Weighted Average Lending Rate (Left Scale)

Growthin Private Fixed Capital Formation (Per cent)

Real Weighted Average Lending Rate and Growth in Private Fixed Capital Formation

11

If inflation is caused by supply side pressures, is tight monetary policy an appropriate response?

12

What is required to revive growth?

13

How much has the rupee
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Powerful Essays

    LAB REPORT - Molar Mass of a Gas
    • 638 Words
    • 3 Pages

    LAB REPORT - Molar Mass of a Gas

    0.003 x 100 / 0.040 = 7.5... ≈ ±8% ---------------------> 1.5% + 8% = ±9.5%…

    • 638 Words
    • 3 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Rn Application Sample
    • 4596 Words
    • 19 Pages

    Rn Application Sample

    0.1% 1.3% 2.0% 2.7% 3.3% 4.0% 4.7% 5.3% 6.0% 6.7% 7.3% 8.0% 8.7% 9.3% 10.0% 10.7% 11.3% 12.0% 12.7% 13.3% 14.0% 14.7% 15.3% 16.0% 16.7% 17.3% 18.0% 18.7% 19.3% 20.0% 20.7% 21.3% 22.0% 22.7% 23.3% 24.0% 24.7% 25.3% 26.0%…

    • 4596 Words
    • 19 Pages
    Powerful Essays
    Read More
  • Satisfactory Essays

    Coleco Case
    • 1035 Words
    • 5 Pages

    Coleco Case

    0,15 0,1 0,05 0 -0,05 -0,1 -0,15 -0,2 -0,25 1981 1982 1983 1984 1985 1986 1987…

    • 1035 Words
    • 5 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    Indian Economy
    • 882 Words
    • 4 Pages

    Indian Economy

    It is meant to test your ability to consider how best to apply the theory,…

    • 882 Words
    • 4 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    CaseStudy PGDM Term2 Macro
    • 459 Words
    • 2 Pages

    CaseStudy PGDM Term2 Macro

    (b) How would inflation be different if real income growth were higher, say 6%? Explain.…

    • 459 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Powerful Essays

    Trade Off Between Inflation and Unemployment
    • 3704 Words
    • 15 Pages

    Trade Off Between Inflation and Unemployment

    Inflation is a major challenge; the world is facing today and has become an impediment to robust growth. However, this problem is not new. In 1981, The Gallup Organisation in the US conducted opinion polls asking people, what is the most important problem, their country was facing, and a majority named inflation.…

    • 3704 Words
    • 15 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    current situation of indian economy
    • 1485 Words
    • 6 Pages

    current situation of indian economy

    India's inflation could accelerate in the current fiscal year due to the rupee's sharp depreciation, said the Reserve Bank of India (RBI).…

    • 1485 Words
    • 6 Pages
    Powerful Essays
    Read More
  • Good Essays

    indian budget analysis
    • 7828 Words
    • 26 Pages

    indian budget analysis

    4. Gross fixed capital formation: Gross capital formation (GCF) declined for the second consecutive year in 2012-13. This indicator deals with how much of the total expenditure in the country is for investment purposes. Capital formation measures how much capital or assets have been added or accumulated over the period. Generally, higher the capital formation, greater is the scope for income growth. The decline in GCF was led by the private corporate sector adversely impacting the growth prospects of the economy.…

    • 7828 Words
    • 26 Pages
    Good Essays
    Read More
  • Powerful Essays

    Economic Real World
    • 2376 Words
    • 10 Pages

    Economic Real World

    On the assignment give, we need to explain with the examples what are the government policies been helpful or harmful in contributing to faster economic growth in developing countries. We also need to list and explain the types of inflations and provide 2 common inflations happen in Malaysia with relevant examples.…

    • 2376 Words
    • 10 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    The Effect of Euro Crisis on India
    • 2405 Words
    • 10 Pages

    The Effect of Euro Crisis on India

    EURO CRISIS: The European debt crisis is the shorthand term for Europe’s struggle to pay the debts it has built up in recent decades. Five of the region’s countries – Greece, Portugal, Ireland, Italy, and Spain – have, to varying degrees, failed to generate enough economic growth to make their ability to pay back bondholders the guarantee it was intended to be. Although these five were seen as being the countries in immediate danger of a possible default, the crisis has far-reaching consequences that extend beyond their borders to the world as a whole.…

    • 2405 Words
    • 10 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Recession in India
    • 4545 Words
    • 19 Pages

    Recession in India

    Directions-(Q. 1-15) Read the following passage carefully and answer the questions given below it. Certain words / phrases have been printed in bold to help you locate them while answering some of the questions. India is rushing headlong towards economic success and modernisation, counting on high tech industries such as information technology and biotechnology to propel the nation to prosperity. India's recent announcement that it would no longer produce unlicensed inexpensive generic pharmaceuticals bowed to the realities of the World Trade Organisation while at the same time challenging the domestic drug industry to compete with the multinational firms. Unfortunately, its weak higher education sector constitutes the Achilles' heel of this strategy. Its systematic disinvestment in higher education in recent years has yielded neither world-class research nor very many highly trained scholars, scientists or managers to sustain high-tech development. India's main competitors - especially China but also Singapore, Taiwan, and South Korea-are investing in large and differentiated higher education systems. They are providing access to large numbers of students at the bottom of the academic system while at the same time building some research-based universities that are able to compete with the world's best institutions. The recent London Times Higher Education Supplement ranking of the world's top 200 universities included three in China, three in Hong Kong, three in South Korea, one in Taiwan, and one in India. These countries are positioning themselves for leadership in the knowledge-based economies of the coming era. There was a time when countries could achieve economic success with cheap labour and low-tech manufacturing. Low wages still help, but contemporary large-scale…

    • 4545 Words
    • 19 Pages
    Powerful Essays
    Read More
  • Satisfactory Essays

    Indian Economy in the Post Wto Era
    • 259 Words
    • 2 Pages

    Indian Economy in the Post Wto Era

    World Trade Organization (WTO) has completed its eleventh year of existence. Its rule based approach based on principles of trade without discrimination, freer trade through negotiation, predictability through binding and transparency, promoting fair competition and encouraging development and economic reform has definitely yielded increased trade in the world. This is evident from the increasing trend in global trade in the world over the years. However, its impact on different sectors of the economy has been a widely debated issue in this country and elsewhere. We get different versions of the impact of WTO on specific sectors from different stakeholders like policy makers, industry, farmers, researchers and general public. Even people within these groups are not unanimous on the types and scale of impact on specific sectors because often their opinions are based on mere perception and partial information. It is now high time to take stock of the situation in different sectors of the economy about the impact of WTO through a common yardstick that is based on hard facts and not just on perception or hearsay. The present paper initially analyzes the performance of different sectors of Indian economy in pre-and-post WTO period using various trade indicators and then benchmarks it against the performance of those sectors in another leading developing country, China. The paper is likely to help policy makers in understanding the problems and opportunities being experienced by different economic sectors of the country and in adopting suitable policies specific to different sectors to make them more competitive in a WTO compatible…

    • 259 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    India Economic Indicators
    • 846 Words
    • 4 Pages

    India Economic Indicators

    The gross domestic product (GDP) of India, according to purchasing power parity was US $2.996 trillion in the financial year 2007. And in terms of official exchange rate, it was US $1.099 trillion. There was a real growth rate of 9 percent in India's gross domestic product for the financial year 2007.…

    • 846 Words
    • 4 Pages
    Satisfactory Essays
    Read More
  • Powerful Essays

    Impact of Economic Crisis on India
    • 15574 Words
    • 63 Pages

    Impact of Economic Crisis on India

    As part of contribution by the United Nations Development Programme (UNDP) to the ongoing dialogue on the impact of the global financial crisis, we present in this collection some ‘initial perspectives’ on its impact on the poor in India, written by some of the country’s leading economists and analysts. Rajiv Kumar presents a succinct analysis of the channels through which the financial crisis has impacted the Indian economy while Bibek Debroy examines the impact of the slowdown in economic growth at a disaggregated level – both by sectors and by regions. Jayati Ghosh analyses the impact of the crisis on agriculture, migrants and homebased workers. Vijay Mahajan unfolds the differential impact of the financial crisis on goods and services consumed by the masses and…

    • 15574 Words
    • 63 Pages
    Powerful Essays
    Read More
  • Good Essays

    International Trade Finance
    • 2866 Words
    • 12 Pages

    International Trade Finance

    The year 2011 has been a difficult year with Japan facing a major earthquake and tsunami, the swelling of unrest in the Middle East oil producing countries, the slowing down of US economy and the Euro area facing major financial turbulence. The current global economic slowdown has its epicenter in the Euro-region but the contagion is being witnessed in all major economies of the world. As a result, India’s short-term growth prospects have also…

    • 2866 Words
    • 12 Pages
    Good Essays
    Read More

Related Topics