2019 OECD Economic Surveys: India 2019

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India has been a growth champion in recent years and has succeeded in taming inflation, the current account deficit and non-performing loans. India's participation in the global economy has risen, with outstanding performances in some services, while the largest diaspora in the world is an asset in developing new markets. India has also lifted many millions of people out of poverty and has made access to housing for all a priority. Ambitious structural reforms – including better targeted household support, financial inclusion initiatives, the implementation of the Goods and Services Tax, the Insolvency and Bankruptcy Code, the new approach to federalism and the corporate income tax reform – have played a key role. The recent economic slowdown and still large number of poor and under-employed people call for a renewed impetus on structural reform. Priorities include: creating fiscal space to finance more and better physical and social infrastructure (in particular health and education), modernising labour laws to remove disincentives for firms to create jobs and employ women, continuing to improve financial sector’s health, further reducing restrictions to trade, and improving property rights and rent regulations to achieve better housing for all.


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Key policy insights

India has been the fastest growing G20 economy since 2014 (). Although GDP per capita in PPP terms still stood at 56% of the average for Brazil, India, Indonesia, China and South Africa (and 17% of the OECD average) in 2018, the pace of convergence has accelerated. India has become a key player in the global economy, with outstanding export performance in some sectors, including information and technology services and pharmaceuticals (Chapter 1).



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