The continuance of Congress as the main governing party following the 2009 general election means that macroeconomic policy in the forecast period will be consistent with the direction pursued in the first five years of UPA rule. The budget for fiscal year 2010/11 (April-March), which was unveiled in February 2010, contains plans for tax reforms, consolidation of the public finances and a reduction in fiscal stimulus measures in the medium term. Monetary tightening will continue into early 2011. Priority will continue to be given to populist measures designed to help the aam admi (common man). The concept of "inclusive growth" will remain central to government policy.

Congress's more dominant role in the governing coalition following the 2009 general election, thanks to a rise in the level of electoral support for the party, initially raised the possibility that economic reform might move higher up the agenda. The party's electoral mandate gives Mr Singh the ability to push for reform more effectively, but its lack of a reliable parliamentary majority means that the most likely scenario in the forecast period is the continuance of merely incremental reform, with the government focusing on areas where changes can be made without legislative action. Moreover, resistance to reform persists in the ruling party and among its core supporters, particularly in rural areas. For the most part, therefore, the government is likely to restrict its focus to targeted spending and piecemeal changes, rather than attempting to implement structural reforms that would unlock more of India's vast economic potential.