Another year is set to bid adieu. The Indian economy started the year 2014 with only moderate momentum when growth seemed to be picking up slowly, with current account deficit narrowing on strong exports, but high inflation and low industrial output, combined with the uncertainty of how the results of the general elections would play out, kept us jittery. Compared to that, the economy today is in a far better shape, with hopes abound that the coming year would bring more good news to it as well as to India Inc.

According to OECD, India is the only major country seeing a 'clear pick up in growth momentum'. The economy is to see an average growth of 6.7 percent over the 2015-19 period. The projection sounds logical. Our domestic economic situation is not a pretty picture yet, but there is growth recovery in sight. The fast improvement in inflation has already built a case for the RBI to lower interest rates early next year, raising hope that the economy will gradually return to a high growth-low inflation trajectory. In addition, the reasonably comfortable position of some key economic indicators including CAD, balance of payment and foreign exchange reserves as well as the sliding crude prices also offer optimism.

The recent surge in the Indian stock markets is another indication of profit growth prospects for 2015. According to a latest poll by Reuters, Indian shares are likely to continue this year's big rally in 2015, driven by reforms measures by the government, which has already sent strong signals that it will not allow political obstructionism to stop reforms, by taking ordinance route for auction of coal blocks, hike in foreign equity cap in the insurance sector and amendment to the Land Acquisition Act. It is also likely that consensus on GST will be achieved soon, which in turn will push up manufacturing, consumption and GDP. Such reforms are also expected to attract more investments to the economy.

Simply speaking, several factors have fallen into place for the economy and what they will lead to largely depends on how the government will try to build on them. Since the new government has taken over, we are witnessing a steady flow of reforms aimed at improving governance, increasing the ease of doing business and attracting foreign investment. Measures like labour reforms and diesel price deregulation are, for example, really encouraging. Similarly, the 'Make in India' initiative is a right step towards achieving our manufacturing dream. Also, the new style of diplomacy has come as a breath of fresh air. I believe such efforts will continue in the coming year.

Wish you all a Happy New Year. Our weekly newsletter returns on January 6.