Outlook for 2011-15

• Despite its lack of a reliable parliamentary majority, the Indian National Congress-led United Progressive Alliance (UPA) coalition government is expected to serve its full second term to 2014.
• Political stability will vary from one region of India to another. The violent insurgency waged by Naxalite (Maoist) groups across large swathes of central and eastern India is becoming the country's most serious security problem.
• Economic reform will continue only incrementally. The government is likely to restrict its focus to targeted spending and piecemeal changes, rather than attempting to implement more sweeping structural reforms.
• The Economist Intelligence Unit expects the government to reduce the size of the budget deficit during the forecast period. The deficit is forecast to narrow to the equivalent of 3.8% of GDP in fiscal year 2015/16 (April-March).
• Real GDP (on an expenditure basis) is forecast to expand by 8.9% in 2011/12, compared with 7.7% in 2009/10 and an estimated 9.1% in 2010/11. Growth will average 8.6% a year in 2012/13-2015/16.

Monthly review

• An Indian newspaper has published reports from a whistle-blowing website, WikiLeaks, alleging that Congress officials paid some members of parliament to back the government in a parliamentary confidence vote in 2008.
• State assembly elections are due to be held in April-May in four big states-the southern states of Kerala and Tamil Nadu, and West Bengal and Assam in the east-and in one of India's union territories, Puducherry (Pondicherry).
• On February 28th the government presented its budget for 2011/12. The budget assumes that real GDP will grow by around 9% in 2011/12.
• At its review of monetary policy on March 17th the Reserve Bank of India (the central bank) raised its main policy interest rates by 25 basis points, taking the repurchase (repo) rate to 6.75%.
• Real GDP growth (at factor cost) slowed to 8.2% year on year in October-December 2010, according the Central Statistical Organisation.
• Industrial output rose by 3.7% year on year in January, up from an upwardly revised 2.5% expansion in December.
• The value of merchandise exports surged by 49.8% year on year to US$23.6bn in February. Exports rose by 31.4% to US$208bn in the first 11 months of 2010/11.