- Catriona Purfield, and Jerald Schiff
- Published Date:
- August 2006
India Goes Global: Its Expanding Role in the World Economy
INTERNATIONAL MONETARY FUND
© 2006 International Monetary Fund
Production: IMF Multimedia Services Division
Cover design: Massoud Etemadi and Jorge Salazar
Cover photograph: Pablo Bartholomew/Netphotograph.com
Typesetting: Bob Lunsford
Figures: Jason Soleil
India goes global: its expanding role in the world economy / Catriona Purfield, Jerald Schiff, editors—[Washington, D.C.]: International Monetary Fund, 2006.
- p. cm.
- ISBN 1-58906-568-9
1. India—Economic conditions. 2. India—Economic policy. 3. Banks and banking—India. 4. Fiscal policy—India. 5. Textile industry—India. I. Purfield, Catriona. II. Schiff, Jerald Alan. III. International Monetary Fund.
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- 1. Opening Its Doors: India’s Emergence on the Global Stage
- Jerald Schiff
- 2. Is Economic Growth Leaving Some States Behind?
- Catriona Purfield
- 3. Trade and Financial Openness
- Renu Kohli and Michael Wattleworth
- 4. Maintaining Competitiveness in the Global Economy
- Catriona Purfield
- 5. How Can India Attract More Foreign Direct Investment?
- Sonali Jain-Chandra
- 6. On the Way to a World-Class Banking Sector
- Dmitriy Rozhkov
- 7. Reining in State Deficits
- Catriona Purfield and Mark Flanagan
- 8. Creating Fiscal Space: Medium-Term Directions for Tax Reform
- Mark Flanagan
- 9. Making Tax Policy Pro-Growh
- Hélène Poirson
- 10. Understanding the Growth Momentum in India’s Services
- Enric Fernandez and Poonam Gupta
- 11. Realizing the Potential: The Case of India’s Textile Sector
- Sonali Jain-Chandra and Ananthakrishnan Prasad
The following conventions are used in this publication:
- In tables, a blank cell indicates “not applicable,” ellipsis points (…) indicate “not available,” and 0 or 0.0 indicates “zero” or “negligible” Minor discrepancies between sums of constituent figures and totals are due to rounding.
- An en dash (–) between years or months (for example, 2005–06 or January–June) indicates the years or months covered, including the beginning and ending years or months; a slash or virgule (/) between years or months (for example, 2005/06) indicates a fiscal or financial year, as does the abbreviation FY (for example, FY2006).
- “Billion” means a thousand million; “trillion” means a thousand billion.
- “Basis points” refer to hundredths of 1 percentage point (for example, 25 basis points are equivalent to ¼ of 1 percentage point).
As used in this publication, the term “country” does not in all cases refer to a territorial entity that is a state as understood by international law and practice. As used here, the term also covers some territorial entities that are not states but for which statistical data are maintained on a separate and independent basis.
The team at the IMF that has worked on this book has been extremely fortunate to be involved with India precisely as it emerged as a global economic power. In the last several years, India has opened itself to the global economy and become one of the world’s fastest growing economies, the leading outsourcing destination, and a favorite of international investors. At the same time, India faces daunting challenges as it seeks to continue to integrate with the world economy, sustain rapid growth, and improve the well-being of all its citizens. The studies in this book document and analyze India’s impressive achievements, while examining the important and difficult steps that remain to consolidate and build on these gains. It is our hope that these studies can contribute to the vibrant public debate—both within India and outside—on the direction of economic policy in India.
This book grew out of the IMF staff’s ongoing policy dialog with the Indian authorities, in particular at the Ministry of Finance and the Reserve Bank of India. The focus of several chapters was suggested by officials from these agencies, while other chapters benefited from a stimulating exchange of views as well as specific comments and suggestions made by the staff of the Reserve Bank and Ministry of Finance on earlier drafts. The Office of the Executive Director for India at the International Monetary Fund, headed by B.P Misra, has been instrumental in facilitating this dialog while providing helpful input into our work. Wanda Tseng, Deputy Director of the IMF’s Asia and Pacific Department, who has led the department’s work on India for several years, provided critical intellectual leadership for the project. Rabin Hattari, Yuko Kobayashi, and Nong Jotikasthira provided outstanding research and administrative assistance. Esha Ray provided invaluable support in editing the book and coordinating its production.
The opinions expressed here are those of the authors and do not necessarily reflect the views of the Indian authorities, the IMF, or IMF Executive Directors.
Average effective tax rate
Association of South East Asian Nations
Agreement on Textiles and Clothing
Business process outsourcing
Capital adequacy ratio
Corporate income tax
Consumer price index
Central Statistical Organisation
Central sales tax
Coefficient of variation
External commercial borrowing
Economic and Political Weekly
Equilibrium real effective exchange rate
Export tax equivalent
Foreign direct investment
Federation of Indian Chambers of Commerce and Industry
Foreign institutional investor
Foreign Investment Promotion Board
Fiscal Responsibility and Budget Management Act
Fiscal responsibility legislation
Group of Five
Group of Seven
Gross domestic product
Gross national income
Generalized method of moments
Gross state domestic product
Goods and services tax
Global Trade Analysis Project
Indian Council for Research on International Economic Relations
International Financial Statistics
Internet service provider
London interbank offered rate
Marginal effective tax rate
Marginal effective tax wedge
Nonbank financial company
Net foreign assets
Net state domestic product
National Sample Survey Organisation
Organization for Economic Cooperation and Development
Ordinary least squares
Personal income tax
Prime lending rate
Purchasing power parity
Reserve Bank of India
Real effective exchange rate
Small and medium-sized enterprise
Textiles and clothing
Twelfth Finance Commission
United Nations Conference on Trade and Development
Vector error correction model
World Development Indicators
World Trade Organization