India is one of the fastest growing economies among the large economies of the world.1 In terms of purchasing power parity (PPP), the Indian economy is the fourth largest after the United States, China and Japan.2 India's share in world GDP (PPP) has increased from 4.3% in 1991 to 5.3% in 2009.
Strong macroeconomic fundamentals and a positive global environment led to a robust growth rate of over 9% during the period 2005‑06 to 2007‑08 (see Table 1). However, the growth momentum could not be maintained during the global economic crisis and the growth rate fell sharply to 6.8% in 2008‑09. Proactive and timely policy support by the Government helped the economy to quickly recover to near normal. The Indian economy grew at close to 8% in 2009‑10 and at 8.5% in 2010‑11. However, with global recovery still far from complete, the outlook for the Indian economy in 2011‑12 would depend, to an extent, on the pace of global recovery. Domestic factors, particularly inflation, have also led to a degree of moderation in the outlook for the current financial year.