Indian economy - An Overview

--By P. Neelakantha Achary

The current fiscal of Indian economy is filled with ups and downs. The Economic Advisory Council to the Prime Minister (EAC) has projected that growth for 2008-09 would be only 7.1 per cent. Earlier, EAC had suggested that the growth would be around 7.7 per cent.

The global economic slowdown has been affecting the Indian economy. The cut in the forecast is a big alarm for the nation, as for the fiscal 2007-08 there was growth rate of around 9 per cent. The fall in the growth rate is due to the global financial turmoil.

All most all the sectors are badly affected due to the global financial crisis, which the export sector has suffered a huge loss. The demand for the goods and services at the global market has been declining due the global turmoil. The mechanism of the demand and supply forces are not enough to check the impact of the global financial crisis.

The government has already declared packages for the economy but still more steps are to be taken. There are difference of opinion among experts over another stimulus package for the economy. The Reserve bank of India (RBI) however has been changing the interest rates and the CRR.

The RBI may further change its policy in order to check the liquidity crisis in India. RBI would review its credit policy on 27 January. Inflation has been the major concern for the economy. Inflation is now under control but once it had touch the highest mark of double digit figure. However, the impact of the global financial crisis is the major cause for the cut in the forecast of growth for the economy.