Financial inclusion expands household banking access while enabling licensing of small and differentiated banks to meet local credit needs.
Financial inclusion mission to provide universal household banking services targets weaker sections with two accounts per household; banks encouraged to offer long term, flexibly structured infrastructure loans and to raise long term funds with reduced regulatory pre emption; framework to authorize private universal banks and license small and differentiated banks, including payment and local area banks, to meet credit and remittance needs; additional Debt Recovery Tribunals to strengthen recovery of non performing assets.

MSME financial strengthening to mobilise venture capital and create technology centres, plus SME bankruptcy reform and local incubation.
Proposals include strengthening the financial architecture of MSMEs-especially those owned or run by SCs, STs and OBCs-via an inter ministerial committee; creation of a large risk capital fund to provide equity, quasi equity, soft loans and other risk capital to attract private venture investment into start ups; establishment of a Technology Centre Network with a dedicated corpus to promote innovation and agro industry; development of an entrepreneur friendly legal bankruptcy framework for SMEs to enable easier exit; and a nationwide district level incubation and accelerator programme.

Pass-through taxation for REITs and InvITs proposed to incentivise investment and unlock long-term infrastructure finance.
Proposal to grant tax-efficient pass-through status to Real Estate Investment Trusts (REITs) and to establish Infrastructure Investment Trusts (InvITs) with similar tax treatment, enabling income distribution without trust-level tax. The measure is intended to mobilise fresh equity and long-term domestic and foreign investment, including from non-residents, for PPP and other infrastructure projects while reducing pressure on the banking system.

Foreign direct investment liberalisation increases sectoral caps and eases conditions for defence, insurance, smart city and manufacturing investment.
The government raised composite foreign equity caps to 49 per cent in defence manufacturing and insurance with full Indian management and control via the FIPB route; relaxed Smart City FDI thresholds and imposed a three-year post-completion lock-in, with an exemption for projects allocating at least 30 per cent to low-cost affordable housing; and permitted manufacturing units with FDI to sell through retail and e-commerce without additional approvals, with manufacturing FDI remaining on the automatic route.

Insurance law amendment to expand regulatory reach and address low insurance penetration and money circulation scheme gaps.
Passage of an Insurance Laws (Amendment) Bill is announced for immediate introduction to strengthen the regulatory framework, increase insurance penetration, and, as part of financial sector reforms, to bridge a regulatory gap under the Prize Chits and Money Circulation Scheme (Banking) Act, 1978 to enable effective oversight of entities operating deceptive money circulation schemes.

Reference rate updates set the benchmark for currency quotations and determine SDR rupee linkage through published cross currency derivations.
The Reserve Bank of India issues Reference Rate determinations for the US dollar and the Euro, publishing current and prior-day rates that serve as the benchmark for deriving other currencies' exchange rates via cross currency middle rates; the publication confirms that the SDR Rupee rate will be based on the published reference rate.

Reference rate publication: USD and Euro reference rates set basis for cross currency exchange calculations and SDR conversion.
Publication of official reference exchange rates records Reference Rates for the US dollar and the Euro, provides derived GBP and JPY rates based on the US dollar reference and middle cross currency quotes, and specifies that the SDR Rupee rate will be determined on the basis of the published reference rate.

Industrial incentives drive manufacturing revival; policy reforms and targeted subsidies aim to boost investment and ease of doing business.
The central policy framework deploys targeted incentives and regulatory reforms to stimulate industrial and manufacturing growth by lowering barriers to investment and improving infrastructure, through the National Manufacturing Policy, FDI policy rationalization, streamlined approvals, e biz facilitation, development of Industrial Corridors, and subsidy or sectoral programmes for challenging areas.

Current account deficit management restored external balance through export promotion and import curbs, improving the trade balance.
The Government implemented measures for Current Account Deficit management-export promotion, curbing non essential and gold imports, improving capital inflows and reducing FX volatility-which, according to the central bank, coincided with an improved trade balance and a significant reduction in the current account deficit.

NPA management: measures introduced to strengthen recovery, monitoring, interbank coordination and early warning mechanisms for banks
Five sectors - infrastructure, iron and steel, textiles, aviation and mining - are identified as stressed, with PSBs bearing high exposures and elevated NPAs. Government measures to address rising NPAs focus on strengthening recovery and resolution through nodal officers, designating asset reconstruction companies as resolution agents, proactive state-level bankers' committees, interbank information sharing for fresh loans, sector-wise NPA analysis, early warning signals, amendments to recovery laws, and improved credit appraisal and post credit monitoring.

Tax and expenditure reform, paired with market liberalisation and stable inflation, proposed to strengthen long-term investment climate.
Improving long term growth prospects requires reforms to secure low and stable inflation via fiscal consolidation, a monetary policy framework and a competitive national food market; to restore sustainable public finances through a strengthened fiscal responsibility framework, simplified GST, transformed tax administration, and expenditure shifts from price subsidies to income support with outcome focused public spending; and to establish legal and regulatory foundations for a market economy by liberalising factor markets, reforming the financial sector, removing outdated agricultural trade restrictions, and modernising warehousing and commodity market regulation.

Financial institutional reforms to strengthen foundations and improve monetary policy transmission, addressing bank lending impediments and transparency.
Reforms will strengthen the institutional foundation via laws, organisations and processes to enhance clarity, consistency and transparency. Key impediments to monetary policy transmission include rigidities in fixed-deposit repricing, government borrowing size, high non-performing assets, inflation and informal finance; recent central bank easing and subsequent rate movements, along with deposit and credit trends and large nonresident deposit inflows, inform the need for institutional and procedural reforms to support effective credit intermediation.

Fiscal consolidation and structural reforms are essential to restore business confidence and restart the investment cycle.
The survey links projected GDP growth to improvements in the external and fiscal balances and strong agricultural output, while warning that deficient monsoon, adverse external conditions and a weak investment climate pose downside risks. Revival of growth requires addressing structural bottlenecks-notably in industry and services-through fiscal consolidation, stable external balance, inflation control, streamlined implementation, tax simplification, repeal of archaic market laws, improved dispute resolution, infrastructure investment and agricultural productivity reforms.

Balance of Payments improvement follows coordinated macro and monetary measures, reducing current account pressures and requiring sustained policy vigilance.
India's Balance of Payments position improved notably in 2013-14, driven principally by government and Reserve Bank of India measures and aided by a macroeconomic slowdown that reduced external demand. The document highlights a marked contraction in the current account deficit, occurring largely in the final three quarters of the year, and stresses that sustaining the improved external position will require continued policy vigilance and coordinated macroeconomic management.

Inflation moderation signals easing wholesale and consumer price pressures, with food inflation remaining a key risk to stability.
WPI and CPI inflation moderated during 2013-14 while food inflation remained elevated, driven by fruits and vegetables and egg, meat and fish. Non Food Manufactured Product inflation stayed benign, suggesting limited broad based pressure. External factors and a possible sub normal monsoon posed risks. Monetary policy shifted from easing to temporary tightening amid exchange market volatility, followed by calibrated normalisation and a policy rate increase to anchor inflation expectations, with liquidity managed through OMO, repo, MSF and variable rate term repos to safeguard financing conditions.

Balance of Payments vulnerability requires a monitoring mechanism to manage capital flow volatility and policy withdrawal effects.
Sustaining improvement in the Balance of Payments is a medium term challenge because recent gains stem from temporary measures-import restrictions, limited period capital flow incentives, and lower import demand-and may reverse as those measures are withdrawn; a mechanism for close monitoring and vulnerability assessment is needed to adapt to external monetary policy normalization.

Balance of payments improvement signals reduced current account deficit and stronger reserves, improving external stability and exchange rate stabilization.
Improvement in India's balance-of-payments position in 2013-14 reflected a narrowed current account deficit, continued rupee depreciation on an annual average basis, and an increase in foreign exchange reserves, indicating strengthened external sector stability.

Trade deficit policy response: import restrictions and capital flow measures stabilized the exchange rate and reserves.
Regulatory and fiscal measures addressed a large trade deficit and capital outflows by restricting non-essential imports and raising customs duties on gold and silver, while augmenting capital inflows through quasi-sovereign bond issuance and liberalized external commercial borrowings. The central bank established a special swap window for FCNR(B) and banks' overseas borrowings to mobilize one-off foreign currency inflows, which together helped arrest negative market sentiment, correct the exchange rate and improve the balance of payments with net reserve accretion.

External debt management preserves sustainability as external debt increases but remains within manageable limits.
India's external debt remained within manageable limits due to the external debt management policy and prudential restrictions; the stock rose to US$404.9 billion at end March 2013, reflecting inclusion of securitized bank borrowings in official statistics. Long term debt increased by 9.1% to US$308.2 billion, while short term debt by original maturity rose 23.7% to US$96.7 billion, influenced by elevated import levels.

Foreign exchange reserves rise as central bank intervention steadies exchange rate and mitigates market volatility.
India's foreign exchange reserves increased from March 2013 to March 2014, attributed to intervention in the foreign exchange market by the Reserve Bank of India to manage the rupee and guard against volatility without targeting a specific rate. In 2013-14 interventions provided a buffer against elevated vulnerability indicators expressed as proportions of reserves and underline the use of reserves as a policy tool for volatility mitigation rather than exchange rate targeting.