The evidence thus clearly demonstrates that India has achieved its growth in recent years with judicious use of capital accumulation while innovating to achieve significant productivity growth. A conducive macroeconomic policy framework, accompanied by greater efficiency in financial intermediation, which transmits appropriate signals with regard to the cost of capital, has contributed to this pattern of growth.
Policy changes have also contributed to the rapid growth in trade and capital flows, which have enabled the diffusion of newer technologies and management systems necessary for continuing innovation and productivity growth. This provides comfort that the improvements in productivity, can be sustained in the medium term.