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Analyzing India’s Current Account Deficit, Inflation Rate and Fiscal Deficit

Project by Aakash Pydi for the Foundation for Democratic Reforms

India’s current account deficit for the 2011-2012 fiscal year was roughly 4.8 % of GDP (~27.8 billion dollars).  The objective of this project is to comprehensively understand the significant causes, potential solutions and economic dynamics of India’s alarming current account deficit. The research for this project was conducted by referring to books, research papers, Government data, videos published on the internet, journals and newspaper articles. As macroeconomic and socio-economic phenomenon tend to be intricately interconnected, the project explores numerous features of the Indian economy such as the inflation rate, Reserve Bank policies, fiscal deficit, contributing collective social tendency, and so on. The project is split into two modules. Module 1 broadly analyzes India’s current account deficit and the necessary way forward for the country to address the deficit. Module 2 exclusively explores India’s inflation rate and fiscal deficit.  Note that the contents of module 2 behave as a subset of module 1 in the context of understanding the drivers of India’s current account deficit.

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