shashank bhide ncaer 15 september 2010
DESCRIPTION
Sustaining India’s growth. Shashank Bhide NCAER 15 September 2010. The long-term story. Half full glass: - 20 year growth 7% (R-S) - 10 % Kelkar - 5.5 % (50 years) Goldman Sachs Half-empty glass: - Low Saving/Investment; Government Dis -saving - Inability to use labour productively - PowerPoint PPT PresentationTRANSCRIPT
![Page 1: Shashank Bhide NCAER 15 September 2010](https://reader036.vdocuments.us/reader036/viewer/2022082422/568131de550346895d984578/html5/thumbnails/1.jpg)
Shashank BhideNCAER15 September 2010
Sustaining India’s growth
![Page 2: Shashank Bhide NCAER 15 September 2010](https://reader036.vdocuments.us/reader036/viewer/2022082422/568131de550346895d984578/html5/thumbnails/2.jpg)
The long-term story
•Half full glass:
- 20 year growth 7% (R-S) - 10% Kelkar- 5.5% (50 years) Goldman Sachs
• Half-empty glass:
- Low Saving/Investment; Government Dis-saving- Inability to use labour productively- Services cannot outgrow manufacturing forever- Agriculture, infrastructure, regional disparities.
![Page 3: Shashank Bhide NCAER 15 September 2010](https://reader036.vdocuments.us/reader036/viewer/2022082422/568131de550346895d984578/html5/thumbnails/3.jpg)
The makers and the breakers of growth
• The drivers– Demography
– Aspiring middle class
– Good institutions
– Low base of productivity
– High TFP growth
• The breakers– Fiscal pressures
– Rising inequality
– Rising regional disparity
– Slow reforms
– Poor governance
– Fragile environment
![Page 4: Shashank Bhide NCAER 15 September 2010](https://reader036.vdocuments.us/reader036/viewer/2022082422/568131de550346895d984578/html5/thumbnails/4.jpg)
Sustainability frameworkThe triggers of unsustainability
The safety valves
The macro sceneFiscal imbalance The fiscal space/ reformsCurrent account imbalance Forex reservesPrivate debt Diversification of marketsCapital markets Good regulatorsInflation PDSThe oil price Forex reserves; fiscal spaceBad monsoon Food reservesInequality measuresPoverty HCR PDS/ employment guaranteeMedian income Productivity growthRegional disparity Finance CommissionProductivity measuresReal wage rates Investment; Social sector spendingCapital/ output ratio Infrastructure;Trade openness; competition
![Page 5: Shashank Bhide NCAER 15 September 2010](https://reader036.vdocuments.us/reader036/viewer/2022082422/568131de550346895d984578/html5/thumbnails/5.jpg)
The crude price shocks: $/barrel
![Page 6: Shashank Bhide NCAER 15 September 2010](https://reader036.vdocuments.us/reader036/viewer/2022082422/568131de550346895d984578/html5/thumbnails/6.jpg)
World output: % YOY
![Page 7: Shashank Bhide NCAER 15 September 2010](https://reader036.vdocuments.us/reader036/viewer/2022082422/568131de550346895d984578/html5/thumbnails/7.jpg)
GDP growth patterns (%YOY)
-4
-2
0
2
4
6
8
10
12
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
World US India
Source: IMF WEOs
![Page 8: Shashank Bhide NCAER 15 September 2010](https://reader036.vdocuments.us/reader036/viewer/2022082422/568131de550346895d984578/html5/thumbnails/8.jpg)
Non-agricultural GDP growth: % YOY
![Page 9: Shashank Bhide NCAER 15 September 2010](https://reader036.vdocuments.us/reader036/viewer/2022082422/568131de550346895d984578/html5/thumbnails/9.jpg)
Accelerating GDP growth: %YOY (10 year moving average)
![Page 10: Shashank Bhide NCAER 15 September 2010](https://reader036.vdocuments.us/reader036/viewer/2022082422/568131de550346895d984578/html5/thumbnails/10.jpg)
Threats to sustainability of high growth
• Fiscal sustainability
• Weak social safety nets
• Inadequate investments in human resources
• Environmental sustainability