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The Indian Economy is on a high growth trajectory since the current government has come into power. The country has embarked upon the path of steady growth owing to an improved performance on various macroeconomic parameters as well as the various reforms announced by the government. A stable macroeconomic environment and the falling commodity prices are some of the factors that have helped the country achieve strong economic growth estimates. The country is expected to register a GDP growth of 7.6% as compared to 7.2% in the previous year registering the highest percentage increase in the last five years.
Average WPI-based inflation was recorded at -2.7% during the year under review; the continued decline in crude oil price which has been one of a major contributors to the declining inflation trend. As a result, the Reserve Bank Of India (RBI) has been able to reduce the repo rate by 100 basis points (bps) since January 2015 upto March 2016. However, the transmission of lower interest rates has not proven effective. RBI hence has directed Banks to move away from the Base Rates to Marginal Cost-based Lending Rate effective 1st April 2016.