04 to 2006 - 07 ), it averaged 8. 6 per cent. the impressive growth performance since 1990s was possible due to the strong foundation of an indigenous industrial base, domestic entrepreneurial class, knowledge enhancing institutions, and improvement in vertical social and economic mobility during the decades 1950s to 1990. the recent growth dividend is not just a miracle of the marketisation, but is built on decades of conscious nation building since independence, and the extension of rbi ’ s mandate during the period, inter - alia, to building of institutions and improving their delivery capabilities. in terms of financial stability, india remained resilient to a series of crises faced by several emerging markets, because of careful pacing and sequencing of economic and financial sector reforms. in the external sector, india has come out with a clean track record, having met all payment obligations in time, even by pledging gold, a cherished national reserve of sentimental value, when it became necessary in 1991 due to liquidity crisis. yet, both sectors have not only become reasonably efficient and resilient but are also in alignment with global best practices. in the current debate on macro - imbalances of global economy, india does not figure at all as a contributing source, since our saving - investment as well as domestic - external demand balance in the economy are by and large appropriate. rbi ’ s policies increasingly recognise global developments, but their adaption to such developments, in the indian context, is tailored to the prevailing status of institutions and markets, immediate relevance and the evolving needs of the country. as an example, the function of financial supervision continues with rbi, but in 1994, this function attained a semi - independent status through the establishment of an overseeing authority in the board for financial supervision – but within rbi. what is the outlook for the next 20 years? prospects for next 20 years, in our view, are bright for all the reasons and the record of performance that i have given. yet, there are several challenges that are to be met in the medium term, as articulated in the recent annual report of rbi, which reflects the views of eminent directors on its board. permit me to list these challenges briefly. these are growth of agriculture sector, improvement in physical infrastructure, fiscal empowerment to enhance coverage and quality of education and health, improvement in governance and further reforms in financial and external sector. the financial sector reforms are aimed at further development of financial markets, especially bond market, enhancing integration of these markets and further improvement in the banking sector

jens thomsen : a brief look at developments in the danish economy statement by mr jens thomsen, governor of the national bank of denmark, at the meeting of the danish economic council, copenhagen, 31 may 2007. * * * since 2004, global growth has been around 5 per cent, and forecasts indicate that it will continue at this level in 2007 and 2008. in europe, growth expectations are higher than the council states, as the european commission's spring forecast shows. this implies a greater potential for danish exports. in other words, demand will still be considerable, notwithstanding the slower growth in private consumption than in 2006. whether consumption growth will fall to 1. 8 per cent is doubtful in view of the development in incomes and the employment situation. thus, the economy is still characterized by a pronounced shortage of labour in many areas. developments in 2006 show that in an upswing it is indeed possible to boost employment by reducing unemployment, increasing the participation rate and importing labour from abroad at the same time. this strategy should be maintained. the council's forecasts indicate that the capacity pressure will continue, and consequently fiscal policy should not stimulate activity. in terms of the proposal for an automatic fiscal - policy response to output gaps of a certain size, calculating the output gap constitutes a problem. different institutions do not reach the same result, and major revisions take place. ( see also : orphanides, a. and s. van norden : " the reliability of inflation forecasts based on output gap estimates in real time ", journal of money, credit and banking, 2005. ) consequently, a sort of a taylor rule for fiscal policy is not expedient. on the other hand, output gap is a relevant – but not the only – indicator when designing fiscal policy since, as the proposal entails, it will be necessary to deviate from a neutral fiscal - policy stance in only a few cases.