The study, Impact and Policy Responses - India, said that the Indian economy has emerged from the crisis relatively unscathed and quickly regained growth momentum, thanks to its own stimulus actions, past reforms, banks' limited exposure to troubled parts of the global financial system, as well as India's robust domestic consumption.

The study, prepared by the Centennial Group International, noted that India's gross domestic product in the third quarter of 2009 grew a robust 7.9% from the year earlier, and consumer confidence also rose strongly, while indicators such as the OECD Lead Indicator on growth and the Dun and Bradstreet Business Optimism Index for India have been trending up.

The study is part of a series of reports that are being discussed at a two-day regional forum, 'Impact of the Global Economic and Financial Crisis', organized by ADB, and being held at ADB headquarters in Manila on 14 - 15 January. Top officials including policymakers, finance ministers, heads of central banks, business leaders and development experts from nearly 20 countries from developing Asia are taking part in the forum.

Offsetting these positive developments were signs of an increase in inflation and a worsening trade deficit in the latter part of 2009. In addition, the nature and extent of the global recovery remained fragile and uncertain, with developed markets such as the US and Europe yet to show evidence of a sustainable and private sector-led economic turnaround.

The study said that India was fortunate the crisis was not protracted, which would have tested the government's ability to continue fiscal stimulus measures for a long period, and potentially compromised its efforts to boost the economy.

Moving forward, India will have to try and improve its fiscal position through more disciplined fiscal management, said the study.

'Subsidies need to be streamlined or replaced by more targeted measures and a new fiscal management framework should rectify shortcomings of the Fiscal Responsibility and Budget Management Act (FRMBA) of 2003,' noted the study.

To build greater resilience to withstand future crisis, India will also need to provide fast acting social 'stabilizers' to help poor communities. This could include quick support for workers laid off as a result of a recession. On the monetary policy front, policymakers should make the consumer price index the primary indicator of inflation, instead of the current two-tier measurement system, which leads to inconsistencies and confusion.

In other parts of South Asia, the study recommends wide-ranging measures to shore up the resilience of economies' such as expanding the diversity of exports, reducing fiscal and current account deficits, cutting banks' bad loans, and lowering dependence on imported oil.#