Stability for growth

India must build on its macro foundations

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Maintaining economic and financial stability at all times is a necessary condition for sustained economic development. However, this is not easy to achieve, particularly for developing economies. There have been several episodes of economic crises in developing economies over the past few decades. India was also exposed to a balance-of-payments crisis in 1991. However, over time, things have changed, and a significant number of developing economies have adjusted their policy frameworks to enhance economic resilience. Reserve Bank of India (RBI) Deputy Governor Poonam Gupta on Wednesday, at the Business Standard BFSI Insight Summit, spoke about the evolution of such policies. In a world that is moving from one crisis to another, Indian policymakers have managed to preserve macroeconomic stability, which has helped the Indian economy grow at comparatively high rates. In fact, it must be recognised that India has not had an external crisis since 1991.