Going for Growth - India

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India Income per capita is growing fast, as productivity catches up, but remains well below both advanced and other major emerging-market economies. Women participation into the labour force is low while most workers are employed in low-productivity activities with no formal job contract and social insurance. Absolute poverty has declined. However, inequality remains large, with wide dispersion in compensation packages and large rural/urban divide in access to public services. Air pollution is very high in many cities and water shortage is acute in some regions. The ongoing subsidy reform promotes equity but the tax system redistributes little. The replacement of multiple indirect taxes levied by the states and central government by the Goods and Services Tax contributes to make India a single market, thus, raising competition and scale economies. Benchmarking states on the ease of doing business and quality of public services promotes the reform process. Reviving investment is key to boosting growth. This will require improving further the ease of doing business and bringing banks back to health. Investing more in education and training, combined with a modernisation of labour laws, would help creating more and better jobs. More investment in public services, such as health care and infrastructure is needed to provide all Indians with access. Growth performance, inequality and environment indicators: India Average annual growth rates (%) GDP per capita

A. Growth

1

Labour utilisation Labour productivity

2002-08 5.5 -0.5 6.1

2012-18 6.0 0.3 5.6

Level 2011 31.1 39

Annual variation (percentage points)

2015

2009-11 0.6 -0.2 Average of levels 2010-2012-2015

GHG emissions per capita3 (tonnes of CO2 equivalent)

2.6 (12.3)*

2.5 (12.8)*

GHG emissions per unit of GDP (kg of CO2 equivalent per USD) Share in global GHG emissions3 (%) * OECD simple average (weighted average for emissions data)

0.5 (0.3)* 6.7

0.5 (0.4)* 6.3

3

Gap to the upper half of OECD countries4

Per cent 0 -10

B. Inequality and environment

Gini coefficient for rural areas2 Gini coefficient for urban areas2

C. Gaps in GDP per capita and productivity are being reduced but remain very large

-20 -30 -40 -50 -60 -70 -80 -90 -100 -110

GDP per capita

GDP per employee

Source: Panel A: OECD, Economic Outlook and Productivity Databases; Panel B: World Bank, PovcalNet; OECD, National Accounts Database and International Energy Agency (IEA), Energy Database; Panel C: OECD, National Accounts and Productivity Database. StatLink 2 https://doi.org/10.1787/888933954990

ECONOMIC POLICY REFORMS 2019: GOING FOR GROWTH Š OECD 2019


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Going for Growth - India by OECD - Issuu