28 January, 2021

Realeconomiks

The rope on which our government walks is a very tight one. Censure them by all means, but have some pity too.

Realeconomiks
outlookindia.com
-0001-11-30T00:00:00+05:53
TEN long years into reform, or what passes for it, and India is still more or less where it was in 1991. Indeed, some critics say that it is worse off now than before reform began. How accurate is this perception of standstill? How justified is the accusation of a slide? The shift towards the market has had several consequences. But, in terms of development per se, the three most important of these are:

  • An increase in the trend rate of GDP growth from around 5.5 per cent to around in the '80s to nearly 7 per cent in the '90s;


  • A slight worsening of income distribution, especially between the rural and urban areas; and


  • The onset of a process by which the poorest regions are getting left out of investment precisely because they are poor.


  • In consequence, an apprehension has grown that the process of market-based reforms, while accelerating growth, may also be worsening regional income disparities and creating unexpected strains and biases. The political response to the new economics has to be viewed in this context.

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