Domestic interest rates on lending have dropped to as low as 5 percent from 20 percent substantially reducing financial costs of businesses. Central to the economic reforms process has been a clear progression towards deregulation of the economy. Prices of petroleum products, gas, energy, agricultural commodities and other key inputs are determined by market.
1  Official rate increased from Rs.4.76 per US dollar to Rs.7.50 per US dollar. 2  For example, Bhagwati and Srinivasan (1975) argued that the effective devaluation was more for imports than the exports. “Foreign Trade Regimes and Economic Development: India”, National Bureau of Economic Research, New York.