CONTENTS 1 STATE OF THE ECONOMY AND PROSPECTS 1-19 Economic growth during 2009-10 Aggregate demand and its composition Production and supply Savings and investments Behaviour of prices and inflation External-sector developments Conduct of monetary policy Fiscal policy developments Social-sector development Climate change Prospects, short term and medium term 2 MICRO-FOUNDATIONS OF INCLUSIVE GROWTH 21-35 Development and distribution The challenge of poverty Subsidies and development Bureaucratic costs and delays Labour regulation, wages and employment A family of inflations and food-sector interventions Social norms, culture and development A miscellany of concerns 3 FISCAL DEVELOPMENTS AND PUBLIC FINANCE 37-62 Central Government finances Budgetary developments in 2009-10 Expenditure trends Interest payments Subsidies Supplementary demand for grants Central Plan outlay Government debt Economic and functional classification Fiscal outcome The Report of the Thirteenth Finance Commission Collection rates Performance of the departmental enterprises of the Central Government Finances of State Governments State-level reforms Consolidated General Government Outlook 4 PRICES AND MONETARY MANAGEMENT 63-89 Prices Average annual trends in WPI inflation Food inflation Annual inflation as per different price indices Main drivers of inflation World food inflation Anti-inflationary measures Monetary developments during 2009-10 Trends in monetary aggregates Money multiplier Movement in other monetary indicators Liquidity management Money market Monetary policy stance during 2009-10 Challenges and outlook 5 FINANCIAL INTERMEDIATION AND MARKETS 91-122 Bank credit Sectoral deployment of credit Priority-sector lending Rural Infrastructure Development Fund Agricultural credit Initiatives for the agricultural sector Micro finance Financial performance of banks Non-banking financial institutions Non-banking financial companies Capital and commodity markets Commodity futures market Insurance and pension funds Challenges and outlook 6 BALANCE OF PAYMENTS 124-144 The global crisis and beyond Balance of payments Current account Capital account Foreign exchange reserves Exchange rate The G-20 External debt Challenges 7 INTERNATIONAL TRADE 145-177 World trade Trade credit during world recession Policy response India's merchandise trade Trade composition Direction of trade Services trade Trade Policy WTO negotiations and India Bilateral and regional cooperation Challenges and outlook 8AGRICULTURE AND FOOD MANAGEMENT 179-207 Gross capital formation in agriculture and allied sectors Crop production 2008-09 Crop production 2009-10 Growth rates of area, production and yield Agricultural inputs Rainfall and reservoir storage Price policy for agricultural produce Progress of agriculture-sector schemes/programmes Allied sectors Credit and insurance Marketing and extension Food management Commodity futures market Challenges and outlook 9 INDUSTRY 208-232 Developments that impacted the slowdown and recovery Growth in major industrial groups Industrial growth by sectors Financing and investment Policy developments and programmes Some critical dimensions of industrial development Challenges and outlook 10 ENERGY, INFRASTRUCTURE AND COMMUNICATIONS 233-268 Overview of performance Power Petroleum Coal Railways Roads Civil aviation Ports Telecommunications Post Urban infrastructure Financing of infrastructure Challenges and outlook 11 HUMAN DEVELOPMENT, POVERTY AND PUBLIC PROGRAMMES 270-293 Human development and the gender situation Trends in India's social-sector expenditures Poverty and inclusive growth Employment Social-sector initiatives Education Health Welfare and development of SCs, STs, OBCs and other weaker sections Climate change Challenges and outlook