- Catriona Purfield, and Jerald Schiff
- Published Date:
- August 2006
India Goes Global: Its Expanding Role in the World Economy
INTERNATIONAL MONETARY FUND
© 2006 International Monetary Fund
Production: IMF Multimedia Services Division
Cover design: Massoud Etemadi and Jorge Salazar
Cover photograph: Pablo Bartholomew/Netphotograph.com
Typesetting: Bob Lunsford
Figures: Jason Soleil
India goes global: its expanding role in the world economy / Catriona Purfield, Jerald Schiff, editors—[Washington, D.C.]: International Monetary Fund, 2006.
1. India—Economic conditions. 2. India—Economic policy. 3. Banks and banking—India. 4. Fiscal policy—India. 5. Textile industry—India. I. Purfield, Catriona. II. Schiff, Jerald Alan. III. International Monetary Fund.
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Renu Kohli and Michael Wattleworth
Catriona Purfield and Mark Flanagan
Enric Fernandez and Poonam Gupta
Sonali Jain-Chandra and Ananthakrishnan Prasad
The following conventions are used in this publication:
In tables, a blank cell indicates “not applicable,” ellipsis points (…) indicate “not available,” and 0 or 0.0 indicates “zero” or “negligible” Minor discrepancies between sums of constituent figures and totals are due to rounding.
An en dash (–) between years or months (for example, 2005–06 or January–June) indicates the years or months covered, including the beginning and ending years or months; a slash or virgule (/) between years or months (for example, 2005/06) indicates a fiscal or financial year, as does the abbreviation FY (for example, FY2006).
“Billion” means a thousand million; “trillion” means a thousand billion.
“Basis points” refer to hundredths of 1 percentage point (for example, 25 basis points are equivalent to ¼ of 1 percentage point).
As used in this publication, the term “country” does not in all cases refer to a territorial entity that is a state as understood by international law and practice. As used here, the term also covers some territorial entities that are not states but for which statistical data are maintained on a separate and independent basis.
The team at the IMF that has worked on this book has been extremely fortunate to be involved with India precisely as it emerged as a global economic power. In the last several years, India has opened itself to the global economy and become one of the world’s fastest growing economies, the leading outsourcing destination, and a favorite of international investors. At the same time, India faces daunting challenges as it seeks to continue to integrate with the world economy, sustain rapid growth, and improve the well-being of all its citizens. The studies in this book document and analyze India’s impressive achievements, while examining the important and difficult steps that remain to consolidate and build on these gains. It is our hope that these studies can contribute to the vibrant public debate—both within India and outside—on the direction of economic policy in India.
This book grew out of the IMF staff’s ongoing policy dialog with the Indian authorities, in particular at the Ministry of Finance and the Reserve Bank of India. The focus of several chapters was suggested by officials from these agencies, while other chapters benefited from a stimulating exchange of views as well as specific comments and suggestions made by the staff of the Reserve Bank and Ministry of Finance on earlier drafts. The Office of the Executive Director for India at the International Monetary Fund, headed by B.P Misra, has been instrumental in facilitating this dialog while providing helpful input into our work. Wanda Tseng, Deputy Director of the IMF’s Asia and Pacific Department, who has led the department’s work on India for several years, provided critical intellectual leadership for the project. Rabin Hattari, Yuko Kobayashi, and Nong Jotikasthira provided outstanding research and administrative assistance. Esha Ray provided invaluable support in editing the book and coordinating its production.
The opinions expressed here are those of the authors and do not necessarily reflect the views of the Indian authorities, the IMF, or IMF Executive Directors.
Average effective tax rateASEAN
Association of South East Asian NationsATC
Agreement on Textiles and ClothingBPO
Business process outsourcingCAR
Capital adequacy ratioCIT
Corporate income taxCPI
Consumer price indexCSO
Central Statistical OrganisationCST
Central sales taxCV
Coefficient of variationECB
External commercial borrowingEPW
Economic and Political WeeklyEREER
Equilibrium real effective exchange rateETE
Export tax equivalentEU
Foreign direct investmentFICCI
Federation of Indian Chambers of Commerce and IndustryFII
Foreign institutional investorFIPB
Foreign Investment Promotion BoardFRBMA
Fiscal Responsibility and Budget Management ActFRL
Fiscal responsibility legislationG-5
Group of FiveG-7
Group of SevenGDP
Gross domestic productGNI
Gross national incomeGMM
Generalized method of momentsGSDP
Gross state domestic productGST
Goods and services taxGTAP
Global Trade Analysis ProjectICRIER
Indian Council for Research on International Economic RelationsIFS
International Financial StatisticsISP
Internet service providerIT
London interbank offered rateMETR
Marginal effective tax rateMETW
Marginal effective tax wedgeMFA
Nonbank financial companyNFA
Net foreign assetsNPA
Net state domestic productNSSO
National Sample Survey OrganisationOECD
Organization for Economic Cooperation and DevelopmentOLS
Ordinary least squaresPIT
Personal income taxPLR
Prime lending ratePPP
Purchasing power parityRBI
Reserve Bank of IndiaREER
Real effective exchange rateSME
Small and medium-sized enterpriseT&C
Textiles and clothingTFC
Twelfth Finance CommissionUN
United Nations Conference on Trade and DevelopmentVAT
Vector error correction modelWDI
World Development IndicatorsWTO
World Trade Organization