ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Growth Record of the Indian Economy, 1950-2008: A Story of Sustained Savings and Investment

This paper first reviews the overall macroeconomic performance in India since independence, and then assesses the likely prospects for growth in the medium term. It argues that India's growth has been largely enabled by the availability of domestic savings, which have increased steadily over the decades. Further, the efficiency of resource use has been high with a long-term incremental capital-output ratio of around 4, which is comparable to the best in the world. While private investment and corporate growth have beenmajor factors in the recent growth upsurge, it is important to note that this period has also been marked by a relative decline in public investment. A revival of public investment, accompanied by higher public savings, would be necessary to improve and expand public services.

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