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Can India Achieve Double-digit growth ?

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  • Richard Herd
  • Paul Conway
  • Sam Hill
  • Vincent Koen
  • Thomas Chalaux

Abstract

In recent years, India has enjoyed one of the highest growth rates worldwide, weathering the global financial crisis better than many other countries. Prudent macroeconomic policies will be critical to prolonging the current expansion, given the risks associated with high inflation and volatile capital flows. A steadfast commitment to fiscal consolidation is needed to continue to reduce the large deficit that emerged in the aftermath of the slowdown and avoid crowding out private investment. Stepping up structural reforms will also be necessary if double-digit growth rates are to be achievable over the coming decade or so. Indeed, the operating environment for private business remains challenging. While infrastructure is improving in key sectors, partly thanks to greater private investment, bottlenecks endure and efforts to intensify competition and ensure continued strong investment are required. Labour market reforms are also required to promote job creation. Rapid economic development has boosted living standards and reduced poverty but poverty remains high. There is a need to strengthen social welfare systems and access to health and education to ensure widespread benefits from continued high growth. This Working Paper relates to the 2011 OECD Economic Survey of India (www.oecd.org/eco/surveys/india) L'Inde peut-elle réaliser un taux de croissance à deux chiffres ? L'Inde a connu, ces dernieres annees, l'un des taux de croissance les plus eleves au monde, et a su mieux que bien d'autres pays traverser la crise financiere mondiale. Pour prolonger l'expansion actuelle, des politiques macroeconomiques prudentes sont essentielles, etant donne les risques lies a une inflation elevee et a flux capitaux volatiles. Le pays devra egalement s'engager resolument sur la voie de l'assainissement budgetaire s'il veut continuer a reduire le large deficit apparu au lendemain du ralentissement economique et eviter l'eviction de l'investissement prive. L'acceleration des reformes structurelles est egalement necessaire pour rendre possible une croissance a deux chiffres sur la decennie a venir. En effet, l'environnement dans lequel operent les entreprises privees reste difficile. Si l'infrastructure s'ameliore dans certains secteurs cles, en partie grace a un accroissement des investissements prives, des goulets d'etranglement demeurent et il faudra s'efforcer d'intensifier la concurrence et de maintenir le dynamisme des investissements. Des reformes du marche du travail seront egalement necessaires pour promouvoir la creation d'emplois. Le developpement economique rapide a stimule le niveau de vie et reduit la pauvrete mais le nombre d'Indiens vivant dans l'indigence reste eleve. Il faudra renforcer les systemes de protection sociale et l'acces a la sante et a l'education pour que la poursuite de la croissance profite au plus grand nombre. Ce Document de travail se rapporte à l'Etude économique de l'OCDE de l’Inde 2011 (www.oecd.org/eco/etudes/inde)

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Bibliographic Info

Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 883.

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Date of creation: 21 Jul 2011
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Handle: RePEc:oec:ecoaaa:883-en

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Keywords: growth; investment; competition; product market regulation; health; education; macroeconomic policies; inflation; labour market; saving; infrastructure; India; demographics; poverty; pauvreté; Inde; facteurs démographiques; épargne; réglementation du marché du travail; inflation; réglementation des marchés de produits; concurrence; infrastructure; politique macro-économique; éducation; croissance; investissement; santé;

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