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Where is India’s Growth Headed?

Publication date

Jan, 2016

Details

NIPFP Working Paper No. 159

Authors

Ila Patnaik and Madhavi Pundit

Abstract

Growth in India declined in the post financial crisis years both due to external and domestic factors. While the slowdown appears to be largely cyclical, it is possible that trend growth may also have been affected especially by negative shocks from the domestic policy environment. In this paper, we analyze the sources of output growth in the past three decades and discuss the outlook going forward. We make projections for the growth of factors of production and the growth of trend GDP per worker for the period 2013-2030. In general, the outlook for factors appears strong. As long as policy reforms support the broad environment for investment in infrastructure and in education and eliminate frictions in the efficient use of labor and capital, all of which can also boost productivity, it does not appear that trend growth is likely to decline in the future.

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