The continuance of Congress as the main governing party following the 2009 general election means that macroeconomic policy in 2011-15 will remain consistent with the direction pursued in the first five years of UPA rule. 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 policy. The government is also likely to pursue tax reforms, consolidation of the public finances and a reduction in fiscal stimulus measures in the medium term. The government's main economic policy preoccupation at present is high inflation; strong inflationary pressures are also worrying the Reserve Bank of India (RBI, the central bank), and its current phase of monetary tightening will continue in the first half of 2011.

Congress's more dominant role in the governing coalition following the 2009 general election, thanks to increased 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.