The Indian rupee has gained considerably since the budget and UP state elections. Nominal GDP is affected not only by GDP growth but also by inflation and Rupee-US dollar exchange rate.

A period of strong nominal GDP growth of 15% from 2003 to 2010 was halted by sharp currency devaluation in 2011, caused no doubt by persistently high inflation. During this period, the gap between inflation and currency change vs dollar was quite wide. In fact, the rupee was unchanged at 46.58 between 1.01.03 to 1.01.2011!!

Now, India is in a similar position where inflation is low, its currency is strong, the fiscal deficit is restrained, debt is on the decline and real GDP is expected to track 7-8+%. If the same repeats itself, the GDP would increase to x 3.5 current levels in 9 years!!