India: Economic Reform and Growth

Occasional Papers, June 1, 1995

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India: Economic Reform and Growth

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Bibliographic details

• Authors: Richard Hemming, Woosik Chu, Charles Collyns, Karen Elizabeth Parker, Ajai Chopra, Oliver Fratzscher
• Published: June 1, 1995
• Series: Occasional Papers
• DOI: https://doi.org/10.5089/9781557755391.084

Summary overview

• Examines the Indian adjustment program of 1991/92 and its initial results.
• Covers long-term growth trends for output, investment, and macroeconomic conditions.
• Analyzes education, labor employment, and poverty in the context of reform.
• Reviews growth, accumulation, and productivity and presents results of India-specific studies.
• Describes the stabilization and adjustment strategy and the response to the reforms.
• Assesses the impact of reforms on unemployment, poverty, and the behavior of private investment.
• Reviews fiscal adjustment and reform.
• Documents recent experience with a surge in capital inflows: overall trends, the investor base, comparison with other countries, and factors behind the flows.
• Evaluates the impact of capital inflows on the economy and the sustainability of capital flows.
• Discusses structural reforms and implications for investment and growth, including:
  • trade reform
  • the investment regime
  • public enterprise reform
  • financial market reform

Major themes and substantive findings

• Long-term trends and macroeconomic condition:
  • Growth trends for output, investment, and macroeconomic condition are analyzed (detailed figures and empirical results are presented in the paper).
• Labor, education, and poverty:
  • Education, labor employment, and poverty are reviewed in relation to reform outcomes.
• Growth, accumulation, and productivity:
  • The paper examines growth, accumulation, and productivity dynamics and reports results from India-specific studies.
• Stabilization and adjustment strategy:
  • The stabilization and adjustment strategy implemented in 1991/92 and the economy’s response to reforms are central topics.
• Capital inflows:
  • Recent experience with a surge in capital inflows is documented, including overall trends, the investor base, cross-country comparisons, and driving factors.
  • The impact of these flows on the economy and their sustainability are assessed.
• Structural reform areas and implications:
  • Trade reform
  • Investment regime
  • Public enterprise reform
  • Financial market reform
  • Implications of these structural reforms for investment and growth are discussed.

Policy discussion and implications (topics covered)

• Stabilization and adjustment strategy and sequencing.
• Fiscal adjustment and reform.
• Managing capital inflows: trends, investor composition, cross-country comparison, and sustainability considerations.
• Structural reform priorities:
  • Trade liberalization and its growth implications.
  • Reform of the investment regime to influence private investment behavior.
  • Public enterprise reform and its role in resource allocation.
  • Financial market reform to support investment and growth.
• Distributional and labor-market considerations:
  • The impact of reforms on unemployment and poverty is assessed.