Narendra Modi inherits a weak economy. The easy options are closed to him. A demand stimulus is out of the question right now. The fiscal deficit is so large that the new government cannot crank the public spending lever. Persistently high inflation means that the Reserve Bank of India is in no position to bring down interest rates. The Indian economy thus needs structural reforms if it is to get out of the current quagmire. These reforms will necessarily take time. Meanwhile, here is a list of six policy options Modi could consider pursuing so as to get things moving......
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