It is this combination of specialist training with operational experience, which is going to make the economics profession relevant to the changing face of banking in India. Conclusion How close are we to the vision of a sound and well-functioning banking system that I outlined a year ago?
A macro-econometric model of the Indian economy shows that a 10 per cent sustained increase in real public investment in non-agriculture sector, financed by money creation leads to an annual inflation rate of about 2.3 per cent and additional GDP growth of one percent, on an average, during the first two years, while in the span of 10 to 15 years, inflation rate rises to about 17 per cent per annum and additional output growth slows down considerably to average 2.7 per cent during this period.