The India Model of Production, Trade and Employment

The basic objective of this study is to evaluate the comparative static effects of selected trade and domestic policy reforms on trade, output, domestic prices, economic welfare and intersectoral allocation of resources. The major reforms analysed in this study relate to reduction in tariff and non-tariff barriers to trade along with rationalisation of the tax-regime. A computable general equilibrium (CGE) model of the Indian economy has been constructed for the purpose of analysis. The present working paper documents the India CGE model of production, trade and employment and is capable of evaluating the comparative static effects of selected trade and domestic policy reforms on output, trade, factor prices, economic welfare and intersectoral allocation of resources. It is a single country (versus rest-of-world) multi sectoral model. The major source of inspiration has been the multi-country structure used in the Michigan Brown-Deardorff-Stern (BDS) CGE model of world production and trade.