II Long-Term Growth Trends
Author:
Mr. Ajai Chopra
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Language:
English
Print Publication Date:
01 Jun 1995
Keywords:
OP; investment; India; liberalization; per capita income; growth performance; TFP residual; private sector; TFP trend; Total factor productivity; Production growth; East Asia

Abstract

For most of the period since independence, India has combined a highly interventionist and inward-looking approach to economic development with generally conservative macroeconomic policies. The development strategy was to build a large, publicly owned, heavy industry sector while leaving the production of consumer goods (imports of which were banned) and agriculture mainly to the private sector. To support this strategy. India relied on a complex system of industrial licensing, high protection against imports, and extensive government intervention in financial intermediation. Macroeconomic policies were driven by the overriding desire for stability and low inflation; on the whole, public sector deficits were moderate and monetary growth was low. Household savings grew quite rapidly as the deleterious effects of financial repression were partly mitigated by low inflation, the spread of bank branches, and the introduction of small savings schemes.

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India
Economic Reform and Growth
ISBN:
9781557755391
ISSN:
0251-6365
Publication Date:
01 Jun 1995
Publisher:
International Monetary Fund
DOI:
https://doi.org/10.5089/9781557755391.084
Pages:
88

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