Indian Economy - General Review 2012-13

Abstract

WHILE INDIAS RECENT slowdown is partly rooted in external causes, domestic causes are also important. The strong post-financial-crisis stimulus led to stronger growth in 2009-10 and 2010-11. However, the boost to consumption, coupled with supplyside constraints, led to higher inflation. Monetary policy was tightened, even as external headwinds to growth increased. The consequents lowdown, especially in 2012-13, has been across the board, with no sector of the economy unaffected. Falling savings without a comme nsurate fall in aggregate investment have led to a widening current account deficit (CAD). Wholesale price index (WPI) inflation has been coming down in recent months.