India's election-year challenge

Fiscal consolidation must take precedence in the upcoming Budget, even if it's an interim one

With the country’s attention focused on India’s moon landing and the G20, what hasn’t received as much attention is that over the past 18 months the Reserve Bank of India (RBI) has managed a difficult juggling act to keep macroeconomic stability. By early 2022, India had accumulated over $670 billion in reserves, equivalent to more than 10 months of imports, nearly twice the current account deficit, and 12 months of forward debt servicing needs.

The RBI has since conducted foreign exchange (FX) sales of almost $90 billion to allow a more gradual depreciation of the rupee from Rs 75 to