India's Economic Challenges
India’ GDP grew by 6% over same period last year in 1 st Qtr 2012; they are expecting a growth of 7.6% next year. But they are faced with 3 main economic challenges : inflation, fiscal deficit and current account deficit Inflation There’s 10% inflation (Consumer Price Index)in India mainly because of food inflation and energy inflation. Otherwise the inflation (core inflation as they call it, which is non food non oil) would have just been 5%. 2009 onwards this rate has been hovering around 9%. Food inflation has been primarily because of the following factors: a) Increase in supply of food has not been commensurate with the growing demand on account of bigger population and more buying power b) Hoarding of onions , sugar and pulses c) Cut in subsidies by govt to reduce fiscal deficit Energy inflation has been because of : a) ...