It is possible to speak of an economic miracle in India. The country has gone from a growth rate of 1.2% of GDP in 1991-1992 to about 5.5% in 1994-1995. For 1995-1996, 6.5% is the projected growth rate. Inflation is a relatively low 8%, the budget deficit is less, and interest rates are still high but decreased from 22% to 17%. Further reductions are expected. Foreign- exchange reserves amounted to $22 billion in Jan 1996, up from $1 billion in July 1991. Prime Minister P.V. Narasimha's actions contributing to India's economic growth are detailed.
Copyright © Royal Institute of International Affairs 1996