chapter  2
13 Pages

Economic environment and challenges


The aim of this chapter is to provide a backdrop of the Indian economic environment that can help readers to assess the emerging growth opportunities and challenges. It is structured into five main sections. The next section outlines the basic contours of India’s economic growth performance after independence, and briefly discusses the role of economic reforms. The second section reviews the macroeconomic trends that characterized India’s growth performance in the post-independence period, with a special focus on the roles of domestic and international actors, including the part played by foreign investment, trade, and other dimensions of openness. It also outlines the underlying structural growth drivers that provide further reassurance about the sustainability of the current growth momentum. The third section discusses the magnitude of the impact of global financial crisis on Indian economy. The fourth section examines the key challenges that pose a risk to India’s economic prospects but also provide opportunities for investors. The last section summarizes the chapter and lists the key lessons from it.