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

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Indian Macro-Economic Data Base in a Consistency Accounting Framework (1950-51 to 1997-98) - I

This study presents for the first time in the Indian context a consistent set of annual macro-economic data from 1950-51 to 1997-98 by integrating the national accounts statistics of the CSO with the balance of payments and the monetary data of the RBI as well as with the fiscal data of the government of India. Despite certain minor problems of definitions and measurements left unresolved by this exercise, the resulting integration helped us to detect the structural changes that have occurred in the real and financial sectors of the Indian economy over the entire sample period, in general, and between the pre- and postliberalisation phases, in particular. In such a context, we have identified many important empirical patterns and regularities, notably the existence of business cycles, the counter-cyclical nature of inflation, the cyclical variations in income distribution, the twin deficits problem, the impact of absorption on reserves, the evolution of the debt-income ratio, the relationship between real interest rates and growth, the sustainability of the fiscal stance, amongst others, which could act as theoretical guideposts for the formulation of issues in the role and conduct of macro-economic stabilisation policy. In this first part, we use a consistency accounting matrix which specifies the linkages between sources and uses of funds as well as between institutional sector accounts. It is seen that the resulting framework ensures the numerical consistency of data drawn from different sources in such a way that both the sectoral budget constraints as well as the overall economywide budget constraints are simultaneously satisfied.

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