ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Budget and Growth

The current wave of economic growth is not unique to India, it is a global phenomenon. India's average growth rate over 2000-04 is identical to that of other emerging market and developing economies, though it is lower than that of developing Asia. Growth has been consumption led, via credit expansion, and yet there are no specific measures to stimulate savings and investments or enhance productivity in the 2006-07 budget.

India's Recent Economic Growth

India?s recent growth episode is strikingly different than earlier in terms of magnitude and sectoral pattern, as well as the sources of growth. However, viewed from a long-term perspective, growth seems to have acquired an unwavering rate in the last two decades. This is an outcome of the weakening of inter-sectoral linkages, which impose constraints on sectoral growth in the short run and on overall growth eventually. There is a need to look ?inward? at the sectors and mutually reinforce their dependence to foster employment and output growth.

Competition and Competitiveness among States

The uneven growth of states in industrial activity and investment highlights the a priori need for enhanced competitiveness. The state governments have an important role to play in the acquisition of competitive assets with proactive policies, such as in infrastructure, complemented by competitive processes. Such a policy matrix will be required if some of the states are to overcome negative investor perceptions of potential returns on investment.
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