Fiscal Policy Case Study

The Burgeoning Indian Economy: Signs of Overheating?

OR

Abstract:

The Indian economy, for most of its independent history, was under the strangles of the Licence Raj. But it opened up in 1991. Subsequently, its economic activity was integrated with the global economy, and record growth ensued. However, by mid-2000s, Indian economy is rattled as most economic variables - such as stock indices, interest rates and fiscal deficit - are on the increasing trend. Moreover its economic growth mostly rode on the success of liberalising several sectors, at the cost of others sectors. Policymakers would have a tough time tackling these economic imbalances.

Effects of economic reforms on various sectors and their effectiveness can be thoroughly discussed through this case. Economic impact of monetary and fiscal policies needn't be neglected.

Pedagogical Objectives:

• To understand and analyse the process of economic reforms in India
• To analyse these reforms' effectiveness
• To know how 'multiplier' and 'accelerator' play out in an economy's growth rate
• To debate on the desirable growth rate for a country like India.

Keywords : Indian Economy, Multiplier Effect, Accelerator Effect, Crowding Out Effect, Interest Rates, Fiscal Policy Case Study, Exchange Rates, Human Development Index, Economic Reforms and Growth, Public and Private Investment, Economic and Social Impacts of Rapid Growth, Five Year Plans, Monetary Policy, Fiscal Policy