India achieved the distinction of being the second-fastest growing economy amid the global recession in 2009, but the joy was marred by the decade's sharpest rise in food prices to the chagrin of common man.
For a country that continued to lose on its exports throughout the year that has gone by, economy achieved a remarkable growth of about seven per cent (during April- September 2009) on the back of focused government stimulus in tandem with well articulated interest rate-cum-monetary policy of RBI.
But it is a paradox of sorts that price line that dipped from a 13-year high into negative zone at one point during the year climbed sharply again, with food inflation touching more than a decade's high of 20 per cent.
From the growth focus, the government had to concentrate on fighting the natural disaster ranging from drought to floods in different parts of the country that led to shortages of foodgrains and fruit and vegetable and the resultant spurt in their prices caused a political storm.
To add to this roller coaster, developments in the economy, including in the share market, the general elections in May that helped Congress led UPA to retain power, lent further colour.
In the New Year, fear of rising inflation will continue to influence the economic policies, whether it is monetary review to be announced by the RBI on January 29 or the Budget to be unveiled by Finance Minister Pranab Mukherjee towards the end of February.
Powered by strong doses of three stimulus packages, the Indian economy did well, only next to China in terms of growth. Despite widespread drought and devastating floods in parts of the country, the economy during 2009-10 is estimated to expand by 8 per cent, up from 6.7 per cent in the previous fiscal.
India's growth during 2008-09 dipped from 9 per cent on account of the impact of the global financial crisis.
Stimulus, green shoots and exit policy will continue to remain the buzzwords as the government in the coming year will move forward to withdraw the extraordinary steps it took to fight the impact of global meltdown, domestic drought and spiraling food prices.
The focus of economic planners during the initial months of 2009 was to continue the stimulus to tide over the impact of financial crisis triggered by collapse of America's iconic banker Lehman Brothers in September 2008.
Not waiting for the election results, Mukherjee, while presenting an interim budget in February 2009 provided the third stimulus package to the industry to by announcing tax cuts and raising public expenditure.
These stimulus packages, backed by easing of monetary policy by the Reserve Bank, yielded some results which economists described as "green shoots". As the green shoots appeared, the economy started looking up and in the second quarter (July-September 2009-10) recorded a high growth rate of 7.9 per cent, much more than anticipated by any analyst or think tank.
The impact, however, was not so visible on the external front as exports continued to remain in the negative zone for most part of the year. This has been on account of slow recovery in the external market.
Now with the US economy during the quarter (July- September) recording a growth of 2.2 per cent, though less that the initial estimate of 3.5 per cent, Indian exports too may look up in future.
After a gap of 13 months, exports in November registered a growth of 18 per cent and rise might continue with the global economy gradually shedding the recession, described as worst since the Second World War.
Buoyed by the performance in the second quarter, the Planning Commission and the Prime Minister's Economic Advisory Committee (PMEAC) have talked about revising their growth projections once the data for the second quarter was made public.
Both these organisations had projected 6.5 per cent growth rate for the current fiscal.
