NCAER is privileged to present the Mid- Year Review for the second successive year in partnership with the India International Centre. Higher inflation and slower industrial growth became persistent features of the Indian economy in 2012–13 following their prominent appearance in 2011–12. Both the fiscal deficit and the current account deficit worsened considerably. The global economy continued to register a weak recovery from the global financial crisis of 2008. Fiscal correction in the US became a political battle between its two political parties with their differing emphasis on expenditure cuts and tax increases. In the Eurozone, a resolution of the banking crisis remained distant. The investment climate at home worsened substantially as policy initiatives to resolve supply-side constraints were delayed and the policy initiatives that were pursued (such as GAAR, the Government’s General Anti- avoidance Rules) were widely taken to be market-unfriendly. As an added challenge, the 12th Five Year Plan launched in 2012–13, with its increased emphasis on infrastructure development and human capital development, made it clear that major additional financial resources from the domestic private and public sectors and from external sources would be needed.