Much of this has been caused by some key events that took place this year. Here is a look at seven of the most
1. New government: The year saw a regime change for the government. The Bharatiya Janata Party won the elections with a whopping majority after a successful election campaign that highlighted the need for reforms. Markets too jumped on hopes that the new government would pass reforms required to get the economy back on the growth path. On the day of the election results, the Sensex jumped over 1000 points. By the time the new government led by Prime Minister Narendra Modi took oath, the Sensex went to 24,700 from 22,300 levels.
2. New reforms: The new government set to task immediately after forming government. It announced changes to the labour laws – some of which were decades old; allowed more foreign investment in sectors like infrastructure and real estate; changes in pension rules; announced new insurance rules as well as the much-awaited Goods and Services Tax. Some of these are pending approval in the Lok Sabha.
3.Oil prices fall: Prices of crude oil in the international markets is trending at $60 per barrel. This is down from $110/barrel-levels at the start of the year. A key reason for this fall has been the reduction in
4.Diesel deregulation: The Indian government subsidises fuel prices. It compensates the fuel-selling companies for their loss. This, in turn, increases the government’s expenditures. In 2014, the government decontrolled diesel prices, allowing companies to sell oil at market prices. This was possible mainly because international prices remained low. As a result, companies announced a cut in diesel prices after the deregulation. Diesel cost Rs 54.34 in New Delhi and Rs 62.6 in Mumbai per litre at the start of the year. It now costs Rs 50.51 in Delhi and Rs 57.91 per litre in Mumbai.