Indian economy, too, is estimated to have slowed to 6.9% in 2011-12 from 8.6% in 2010-11
as price increases across products and commodities and high interest rates impacted
consumer demand and industrial activities. The central bank recently cut the CRR for the
first time in more than two years, signalling lower interest rates that will boost demand,
production and investment. One major problem the country is facing is the recent free fall
in the value of the rupee, which is making imports-which include crude oil and several
raw materials-costlier. This could push inflation and that would make the central bank
tighten its monetary policy again. The positives include prediction of normal monsoon,
lower average age of consumers and their increasing aspirations, increasing demand for
real estate and the country's infrastructure drive. The growth projections for 2012-13
continue to be muted, around 6.5%, on account of policy roadblocks, dented investor
confidence and lower consumer demand.