There is some slack in all these aspects, as a result of which India is not harnessing its full long-term growth potential. However, opportunities exist for India to step up its high growth rate still higher.
To assess the role of innovations in the Indian economy, I will document the estimated contributions of productivity gains to real GDP growth. I then focus on the role of financial sector reforms in contributing to innovation and growth. Finally, I will conclude by outlining the role of monetary policy in sustaining growth and innovations by ensuring price and financial stability.