India Macro + Dashboard Capstone

Learning objectives

By the end you can:

1. State the India macro thesis as one coherent frame: a young, domestic-demand-led, services-heavy, rapidly financialising economy with a real growth engine and three honest constraints (jobs, manufacturing share, human capital). Hold the bull and the caveat in the same sentence, without collapsing into either boosterism or declinism.
2. Explain the RBI's flexible-inflation-targeting (FIT) framework in operation: the repo rate as the anchor, the SDF/MSF liquidity corridor, and the CRR and (India-specific) SLR. Read a live MPC resolution for its India-specific signals: the stance, the vote split, the headline-CPI framing, and the liquidity stance underneath the headline rate (building directly on M7.02).
3. **Explain why India runs a *managed float* rather than a fixed or a freely-floating rupee, describe how RBI FX intervention works and its domestic-liquidity side effect, and compute and interpret the reserves-adequacy metrics**: months of import cover, reserves-to-short-term-external-debt (Guidotti–Greenspan), and the IMF ARA composite.
4. Lay out India's growth engine and its limits: the demographic dividend (and the jobs caveat: it is a dividend only if employed), the "India Stack" (GST formalisation, the IBC's credit discipline, UPI/digital public infrastructure, Aadhaar), domestic-demand-led growth (its resilience and its ceiling versus the East-Asian export model), and the SIP/financialisation-of-savings flow that now lets domestic money cushion foreign outflows. Set those alongside the constraints (labour-force participation, the stuck ~17% manufacturing share, and human-capital/learning gaps).
5. Read India's fiscal picture like an analyst, meaning the deficit trajectory and the debt level, and explain the single fact that makes it resilient rather than fragile: it is overwhelmingly rupee-denominated and domestically held, so India cannot suffer the dollar-debt sovereign crisis that felled Argentina or Sri Lanka (the "denomination is destiny" point from M7.04), while still naming the real constraint (the interest-to-revenue burden).
6. Trace India in global flows: the structural current-account deficit and why it is structural; the oil-import sensitivity and the twin-deficit-via-oil channel (quantified with a rule of thumb); FPI flows and the significance of the JPMorgan/Bloomberg bond-index inclusion; and the resilience buffers built since the 2013 taper tantrum that moved India off the "Fragile Five" list.
7. Navigate the primary Indian data sources precisely: RBI DBIE, MOSPI/NSO (CPI, IIP, GDP, PLFS), the Ministry of Finance Economic Survey and Union Budget, CMIE, and PRS Legislative Research, knowing for each what it releases, when, and exactly where to click.
8. Build and read the ~18-indicator macro dashboard as rate-of-change and versus-expectations, map the reading onto the growth–inflation 2×2 and the debt-cycle stage, and write a regime memo that names the regime, places the cycle, and ends in a defensible portfolio stance with its falsification triggers.

Prerequisites & connections

Builds on. The whole of Phase 7. M7.01: the debt cycle and S = I are the frame the dashboard maps onto and the reason the current account (S − I) matters. M7.02: the entire RBI toolkit section (§4.2) is a direct application. The repo, the SDF/MSF corridor, CRR/SLR, and the managed-float FX-intervention mechanics are taught there and operated on India here; you cannot read §4.2 without it. M7.03: CPI vs core vs WPI, the yield curve, and "rates are gravity" are the inflation/policy and financial-conditions blocks of the dashboard. M7.04: the r-vs-g debt-dynamics arithmetic and "denomination is destiny" are the whole of the fiscal section (§4.6); the resilience claim is that argument applied to India. M7.05: Minsky's stages, the leading/coincident/lagging taxonomy, and the growth–inflation 2×2 are the regime map (§4.9); "assets are priced off surprises" is why the dashboard reads versus-expectations. M7.06: the impossible trinity, the balance of payments, EM sudden stops, and commodities-as-signals are the global-flows section (§4.7); the rupee section (§4.3) is the impossible trinity's Indian answer. From earlier phases: M3.02–M3.03 (the equity risk premium, the country-risk premium for India, and the cost of capital), because macro is where the discount rate's inputs come from; M0.03 (real vs nominal, Fisher), because India's higher inflation makes the real-vs-nominal distinction matter more than it does for a US investor; and M5.01–M5.02 (banks and NBFCs), because CRR/SLR, CASA, credit growth, and ALM are the plumbing through which all of this reaches a lender's P&L.