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Macro economic measures identified in the Credit Policy Statement issued by Reserve Bank of India (24 Oct, 2008):-
Gross Domestic Product (GDP):
The GDP at the present scenario hovers around 7.9% whereas in the previous year it was at a staggering 9.2%. Taking this into account, the GDP growth forecast has been revised to a rate of 7.5-8%.
Inflation:
On the basis of Wholesale Price Index:
Inflation which is hovering around 11% at present is expected to be controlled to 7% around within March, `09. In the medium term the target is to decrease inflation to 5%, keeping in mind the global rate of around 3%.
On the basis of Consumer Price Index:
This has also shown a stark increase from 7.3% to 9% within a year.
Money Supply Rate:
The money supply rate has lowered to a value of 20.3% from 21.9% in the earlier year. Further moderation is expected to lower it to 17% according to the Annual Policy Statement of April, 2008.
Foreign Exchange Reserves:
The foreign exchange reserves was depleted by US$ 35.8 billion, and stood at US$ 273.9 billion.
Foreign Exchange Rate:
There was an 18.9% depreciation of rupee with respect to US Dollar, 0.4% depreciation with respect to Euro, 1.1% depreciation with respect to Pound Sterling and 19.1% depreciation with respect to Japanese Yen.
Understanding of the Business Environment:-
The Mid Term Review is been set at a point of time, when the international money markets are being severely disrupted. The “sub-prime” crisis in US has greatly challenged the business environment of the world. Governments across the world have started taking measures in an aggressive, radical and unconventional manner to restore calm and confidence in the ma ...