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Ashok Kotwal
On demonetisation
Posted on: 23 Dec 2016
On the evening of 8 November, the Prime Minister announced on national television that Rs. ... read on »
A symposium on Piketty: Introduction
Posted on: 15 Jun 2015
Thomas Piketty’s book on ´Capital in the Twenty First Century’ has made waves. The f ... read on »
Emerging challenges: Economic and social
Posted on: 06 Aug 2014
To mark the second anniversary of I4I in July 2014, we invited two eminent scholars – Abhi ... read on »

Topic: Economic Growth

Income inequality in a globalising world
Miguel Niño-Zarazúa , Laurence Roope , Finn Tarp
Posted on: 17/02/2017 09:38:34

Since the turn of the century, income inequality has risen to be among the most prominent policy issues of our time. This column looks at inequality trends in recent decades. While relative global inequality has fallen, insufficient economic convergence, together with substantial growth in per capita incomes, has resulted in increased absolute inequality since the mid-1970s. The inclusivity aspect of growth is now more imperative than ever.
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Book review: ´India’s long road´ by Vijay Joshi
Pulapre Balakrishnan
Posted on: 21/12/2016 09:38:18
Tags:  


In this article, Pulapre Balakrishnan, Professor of Economics at Ashoka University, reviews Vijay Joshi’s book, ‘India’s long road: The search for prosperity’.
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Will demonetisation lead to a protracted economic slowdown?
Radhika Pandey , Rajeswari Sengupta
Posted on: 15/12/2016 09:30:09

In this article, Pandey and Sengupta argue that the impact of the contractionary demand shock triggered by the note ban will gradually radiate from cash-intensive activities to virtually every sector of the economy.
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GDP conundrum: Some areas of concern around growth overestimation in Indian manufacturing
Amey Sapre
Posted on: 18/11/2016 09:24:34
Topics:   Economic Growth


Based on the new GDP series, large upward revisions in manufacturing growth rates were made – from 1.1% to 6.2% in 2012-13, and from -0.7% to 5.29% in 2013 – 14 that were not reflective of the actual performance of the sector during the period. In this article, Amey Sapre, doctoral student in Economics at IIT Kanpur, analyses some of the methodological issues in measuring growth in the manufacturing sector.

This is the third of a four-part series.

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GDP conundrum: Is India booming?
Rajeswari Sengupta
Posted on: 16/11/2016 14:05:01
Topics:   Economic Growth
Tags:   GDP , data


Rajeswari Sengupta, Assistant Professor at IGIDR, points out that the methodology used for the new GDP series seems to be underestimating the GDP deflator, which in turn is causing real growth to be overstated, perhaps by as much as 2 percentage points.

This is the second of a four-part series.

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GDP conundrum: What makes the changes in the new series so radical?
J. Dennis Rajakumar , S.L. Shetty
Posted on: 16/11/2016 13:00:28
Topics:   Economic Growth
Tags:   GDP , data


Dennis Rajakumar and S.L. Shetty of the EPW Research Foundation, present a detailed explanation of the wide-ranging changes in the new 2011-12 National Accounts Statistics series.

This is the first of a four-part series.

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Introduction to e-Symposium: The GDP conundrum
Parikshit Ghosh
Posted on: 16/11/2016 00:40:44
Topics:   Economic Growth
Tags:   GDP , data


Ever since India’s Central Statistical Organisation came out with the new GDP series with 2011-12 as the base year, controversy has surrounded it. The CSO claims that the new series is calculated based on a number of methodological changes that bring India closer to international practice. However, the resulting high growth figures do not seem to quite agree with several other indices that usually reflect the strength of the economy.

To examine the issue, I4I Editor Parikshit Ghosh is hosting an e-Symposium over the next few days. A panel of experts will explain, in detail, the exact changes in estimation methods and identify potential problem areas that could be a source of overestimation.

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Justice delayed is development denied: The effect of slow courts on economic outcomes in India
Amrit Amirapu
Posted on: 22/08/2016 09:53:17
Topics:   Economic Growth


India´s formal judicial system is infamously slow, even for a developing country. What is less well established is whether this matters to economic outcomes. This column uses state-level variation in the speed of courts coupled with the fact that certain industries rely on contract enforcement more than others: to show that slow courts in India have a substantial negative impact on output and employment growth in the formal manufacturing sector.
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The tussle between RBI and Ministry of Finance: A different dimension
Gurbachan Singh
Posted on: 18/08/2016 09:36:28

The popular belief about the tussle between RBI and the Ministry of Finance is that it is an issue of the trade-off between inflation and economic growth, with the former more focussed on controlling high inflation and the latter emphasising high growth. However, according to Gurbachan Singh, there is a different dimension to the story; the Ministry doesn’t fully appreciate that RBI cannot ignore market forces while making announcements about interest rates.
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What does China’s ‘new normal’ mean for India?
Sharmila Kantha
Posted on: 17/06/2016 10:28:58

China’s new normal – a growth rate of at least 6.5% - has been set as a target in its 13th Five Year Plan. In this article, Sharmila Kantha, Principal Consultant, Confederation of Indian Industry, contends that the potential implications of the Chinese deceleration for the Indian economy need to be analysed in detail.
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Painful spillovers from slowing BRICS growth
Raju Huidrom , Ayhan Kose , Franziska Ohnsorge
Posted on: 08/06/2016 10:19:03
Tags:   BRICS


A synchronous growth slowdown has hit emerging markets, especially the BRICS, since 2010, with the potential for significant adverse spillovers to the rest of the world. This column estimates that a 1 percentage point decline in BRICS growth could reduce global growth by 0.4 percentage points, and growth in other emerging markets by 0.8 percentage points, over the following two years.
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Does democracy cause growth?
Daron Acemoglu , Suresh Naidu , Pascual Restrepo , James Robinson
Posted on: 03/06/2016 09:30:46

Many analysts view democracy as a neutral or negative factor for growth. This column discusses new evidence showing that democracy has a robust and sizeable pro-growth effect. It finds that a country that switches from non-democracy to democracy achieves about 20% higher GDP per capita over the subsequent three decades.
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Why outward FDI should be encouraged
Natasha Agarwal
Posted on: 22/04/2016 10:30:40
Topics:   Economic Growth


The ‘Make in India’ programme seeks to incentivise global investors to manufacture in India. In this article, Natasha Agarwal, an independent research economist argues that efforts should also be made to support Indian businesses to invest abroad as several direct and indirect benefits accrue to the home country from outward foreign direct investment.
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Can India beat this slowdown?
Jayan Jose Thomas
Posted on: 24/02/2016 09:33:10

RBI Governor Raghuram Rajan has cautioned the government against seeking to generate economic growth by increasing public spending and hence, adding to the fiscal deficit. In this article, Jayan Jose Thomas, Associate Professor of Economics at Indian Institute of Technology, Delhi, puts forth the view that the only engine that can pull the Indian economy forward at the moment is government expenditure.
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Fiscal deficit and growth slowdown
Gurbachan Singh
Posted on: 17/02/2016 09:36:11

Ahead of the Union Budget, several policymakers and economists in India have advocated increasing public spending to spur economic growth. In this article, Gurbachan Singh argues that even if India is facing a slowdown, a larger fiscal deficit is not the solution – more so now that RBI and the government have adopted inflation targeting. The prospect of a fiscal crisis may be farfetched but India may be incurring costs differently.
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A conversation on development - I
Kaushik Basu , Parikshit Ghosh
Posted on: 03/02/2016 09:36:07

Parikshit Ghosh (Associate Professor of Economics, Delhi School of Economics) speaks with Kaushik Basu (Chief Economist and Senior Vice President, World Bank and former Chief Economic Adviser, Government of India) on issues ranging from the change in World Bank’s mission and its engagement with the world, rising inequality in the developed world, managing the negative side effects of growth, to the role of behavioural economics and paternalism in development, and the exclusionary nature of the ongoing digital revolution.

This part of the interview focuses on global issues. This is the fourth in the series of I4I Conversations.

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West Bengal from an external perspective
Ashok Lahiri
Posted on: 04/01/2016 09:23:05
Topics:   Economic Growth
Tags:   West Bengal


The once prosperous, industrialised state of West Bengal is now lagging behind all-India average figures in both economic and social indicators. In this article, Ashok Lahiri, former Chief Economic Adviser, Government of India, contends that the state will have to work hard on multiple fronts in order to overcome the slowdown, which can partly be attributed to the almost uninterrupted Communist regime between the late 1960s and 2011.
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Boom and Bust: Institutional causes of India’s growth slowdown in 2011
Kunal Sen
Posted on: 22/12/2015 09:31:23
Tags:  


The slowdown in India’s growth in 2011 is generally attributed to the global financial crisis and domestic policy paralysis. In this article, Kunal Sen argues that the high growth rates in the 2000s were driven by ‘closed deals’ between the political and business elites. Mobilisation of the masses against corruption and actions by accountability institutions in 2011 disrupted this trend and halted the growth.
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Elephant vs. Dragon: Growth and development
Mahendra Dev
Posted on: 11/12/2015 09:26:29
Topics:   Economic Growth


The Indian economy expanded by 7.4% during July-September 2015, as compared to China’s growth rate of 6.9% over the same period. In this article, Mahendra Dev, Vice Chancellor of IGIDR, examines the prospects of the two economies in terms of economic growth, manufacturing and social indicators. He contends that the slowdown in China presents opportunities for India; however, even if India grows faster than China, it can catch up to it only after 25 years or so.
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Tolerance and respect for economic progress
Raghuram Rajan
Posted on: 08/12/2015 09:39:32
Tags:   democracy


In his recent speech at IIT Delhi, RBI Governor Raghuram Rajan contends that ideas are the key to economic growth. The two essentials to keep the ideas factory open are to foster competition in the marketplace for ideas, and to protect the right to question and challenge in an environment of respect and tolerance
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India, China and growth forecasts
Kaushik Basu
Posted on: 02/12/2015 09:47:52
Topics:   Economic Growth
Tags:   China


The World Bank and IMF have predicted that India’s growth rate would overtake that of China in 2015-16. In this article, Kaushik Basu, Senior Vice President and Chief Economist at the World Bank, contends that the resulting high expectations for India lie not in the growth crossover – which is not as significant as some make it out to be – but in the dynamics underlying the country’s aggregate numbers.
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The rolling global crisis and India
Ashoka Mody
Posted on: 07/09/2015 10:08:18
Topics:   Economic Growth


We are in the midst of a global growth crisis that began in 2007. In this article, Ashoka Mody, Professor of International Economic Policy at Princeton University, contends that the pervasive global weakness will ultimately harm – and not benefit – India, especially since it is not competitive. China has been the lynch pin of the global economy for a decade; if China goes into a swoon, so will India.
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Has the recession which began in 2012 ended?
Ajay Shah
Posted on: 04/09/2015 09:42:41
Topics:   Economic Growth


The high growth rates visible in the new GDP data suggest that the recession which began in the first quarter of 2012 has now ended. Based on analysis of data on firms, investment and Balance of Payments, this column argues that the new GDP data does not square with other data which indicates slow growth and a continuation of the 2012 recession.
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Moving beyond the growth-versus-redistribution debate
Maitreesh Ghatak
Posted on: 14/08/2015 10:06:45

The two dominant narratives on the state of the Indian economy – one centred on growth and the other on poverty – are in a constant state of conflict. In this article, Maitreesh Ghatak, Professor of Economics at the London School of Economics, argues that we need to move beyond the stale growth-versus-redistribution debate and focus on economic mobility through investments in human capital.
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Charting a course for the Indian economy
Karthik Muralidharan , Arvind Subramanian
Posted on: 05/08/2015 09:56:35

Karthik Muralidharan (Associate Professor of Economics, University of California, San Diego) speaks with Arvind Subramanian (Chief Economic Adviser, Government of India) on a broad set of issues ranging from the uniqueness of the Indian development model, the political economy of reforms, reducing factor misallocation in the economy, enhancing State capacity, financing India´s infrastructure needs, to the implications of the Fourteenth Finance Commission, improving the design of social welfare programmes, and climate change.

This is the third in the series of I4I Conversations.

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India’s macroeconomic outlook: Is uncertainty the new paradigm?
Bornali Bhandari
Posted on: 26/07/2015 00:03:40
Topics:   Economic Growth
Tags:   GDP


The provisional growth estimate for India for 2014-15 is 7.3%, higher than 6.9% growth in 2013-14. In this article, Bornali Bhandari – a Fellow at the National Council of Applied Economic Research – argues that the figures mask the volatile path that growth has taken in 2014-15. She discusses the key uncertainties faced by the Indian economy last year, and their implications for growth going forward.
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Creating a services value chain between India and Thailand
Tanu M. Goyal , Arpita Mukherjee
Posted on: 08/07/2015 15:19:15

In the past two decades, India has signed several bilateral and regional comprehensive free trade agreements with Southeast Asian countries, which are likely to enhance services trade, investment and cooperation in the region. This column explores the prospects for creation of a services value chain between India and Thailand. It contends that integrating services may facilitate growth in Indian manufacturing by supporting production networks.
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Land acquisition, industrialisation, and displaced households
Saumik Paul , Vengadeshvaran J. Sarma
Posted on: 01/07/2015 09:44:35

Does industrialisation on acquired land benefit those displaced? Evaluating the long-term livelihood effects of the first Special Economic Zone in the state of West Bengal, this column finds that the impact on displaced households is mixed. While they are more likely to be employed in the industrial zone, their returns to education are lower than that of other households.
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Growth and inequality: The contrasting stories of India and Brazil
Alexandre de Freitas Barbosa , Gerry Rodgers
Posted on: 29/06/2015 09:47:37
Tags:   Brazil


The development paths of India and Brazil are, in some ways, mirror images of one another. While growth and inequality were both high in Brazil until 1980 and then declined – first growth declined in the 1980s, and later inequality – the reverse is true for India. This column compares the experiences of the two countries, examining their patterns of growth and inequality and the factors that underpin them.
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Clearing the fog on the new GDP numbers
Saugata Bhattacharya
Posted on: 24/06/2015 09:44:38
Topics:   Economic Growth
Tags:   GDP , data


The Central Statistics Office recently changed the way GDP is calculated in India, revising the growth estimate for 2013-14 from 4.7% to 6.9%. Many are confused and skeptical about the new numbers, partly owing to a perceived mismatch between the higher growth and underperformance of other economic indicators. In this article, Saugata Bhattacharya, Senior Vice President and Chief Economist at Axis Bank, contends that a credible economic rationale underlines the new methodology. He demonstrates that corporate data are consistent with the national accounts estimates, and this has a bearing on future growth expectations.
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Private investment and income disparity across Indian states
Jagannath Mallick
Posted on: 03/06/2015 00:00:00

Liberalisation reforms in India in the 1990s offered private investors the freedom to choose their investment location in the country. This column finds that income disparity across low-income states in India increased in the post-reform period, while it reduced across middle-income states. This is largely explained by private investment, which in turn depends on human capital and infrastructure of states.
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Where is India’s growth story headed?
Ila Patnaik , Madhavi Pundit
Posted on: 25/05/2015 00:00:00

The global financial crisis and domestic policy paralysis led to a decline in firms’ investment activities and investors’ business confidence in India. Could this have affected the economy’s long-term growth? This column contends that institutional capacity for reform and the right policy action can render the negative investment shock temporary, and ensure that the trend growth of output remains strong.
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Assessing the economic effects of India ‘Looking East’
Ganeshan Wignaraja
Posted on: 22/05/2015 00:00:00

PM Modi recently said that India needs to move from ‘Look East’ to ‘Act East’ and that this is a key component of his government’s foreign policy. In this article, Ganeshan Wignaraja, an economist at the Asian Development Bank, assesses the impact of India’s ‘Look East Policy’ of 1991 on India-East Asia economic integration. He contends that closer ties with East Asia can lead to significant economic gains for India provided government and businesses work together to promote reforms and regional integration.
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Why do so few women in India work?
Piritta Sorsa
Posted on: 27/03/2015 00:00:00

Only about a third of working-age women in India have jobs. This column analyses the determinants of women’s participation in the labour market in India and finds that factors such as family income, cultural norms and gender wage gap play an important role. It suggests that raising female labour force participation could boost economic growth by up to 2 percentage points.
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Will India really grow faster than China?
Chetan Ghate , Peter Robertson
Posted on: 23/03/2015 00:00:00
Topics:   Economic Growth


According to the IMF, India will overtake China to be the fastest growing economy this year. In this article, Chetan Ghate and Peter Robertson assess the validity of this claim. In their view, the challenge for India is to not only catch up with China, but to also catch up with itself. Strong democratic institutions and the right economic reforms can work in India’s favour.
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‘Cry, the Beloved Country’: Mending Punjab’s economy
Nirvikar Singh
Posted on: 11/02/2015 00:00:00

The growth rate of Punjab, which once ranked among India’s most affluent states, is slowing. In this article, Nirvikar Singh, who holds the Sarbjit Singh Aurora Chair of Sikh and Punjabi Studies at University of California Santa Cruz, diagnoses key issues with the Punjab economy and provides his perspective on what it would take to mend it.
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Financing India’s infrastructure growth
Samik Metia
Posted on: 12/01/2015 00:00:00

Interest rates in the developed economies are still at very low levels, while investors are looking for high and stable returns for their money. This article outlines an innovative proposal for financing India’s infrastructure needs via government bonds targeted at foreign investors, with returns linked to the growth rates in the country.
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Can services be a growth escalator in low-income countries?
Ejaz Ghani
Posted on: 01/12/2014 00:00:00
Topics:   Economic Growth


Just like the East Asian Tigers, the Lions of Africa are now growing much faster than the developed economies. However, this column shows that the growth escalators in Africa are different than in East Asia. The East Asian Tigers benefitted from a rapidly expanding manufacturing sector. The African Lions are benefitting from increases in productivity in the service sector, while the agricultural sector remains unproductive.
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A conversation on Bihar
Karthik Muralidharan , Anjani Kumar Singh
Posted on: 03/11/2014 00:00:00
Topics:   Economic Growth


I4I Guest Editor Karthik Muralidharan (Associate Professor of Economics, University of California, San Diego) speaks with Anjani Kumar Singh (Chief Secretary, Government of Bihar) during the IGC Growth Week in London, on issues ranging from the successes and challenges of Bihar in the past five years, constraints on industrialisation, skilling, spatial distribution of development, to frequent transfer of bureaucrats and role of research inputs in policymaking.
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From ‘Mess in India’ to ‘Made in India’ as a global brand?
Maitreesh Ghatak
Posted on: 15/10/2014 00:00:00

PM Modi recently launched the ‘Make in India’ campaign to attract investment and boost manufacturing. In this article, Maitreesh Ghatak contrasts the campaign with the Chinese model of economic governance, and reflects on its potential to enable higher growth and poverty reduction.
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Do location-based incentives promote industrialisation?
Ritam Chaurey
Posted on: 23/09/2014 00:00:00

In a bid to industrialise the relatively under-industrialised states of Himachal Pradesh and Uttarakhand, the government implemented a tax incentive and capital subsidy scheme in the two states in 2003. This column finds the policy change led to new business creation and growth of existing firms in these states, most of which was not at the cost of neighbouring regions.
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Investment in Pakistan: Prospects and challenges for India
Samridhi Bimal
Posted on: 21/07/2014 00:00:00
Topics:   Economic Growth
Tags:   Pakistan , FDI


With the growing importance of India as a leading source of FDI in South Asia, and Pakistan’s liberal investment policies, there is great potential for Pakistan to attract FDI from India. This column examines prospects and challenges for Indian investment in Pakistan, and recommends policies that can create a mutually beneficial business environment for the two nations.
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Growing through cities in India
Ejaz Ghani , William Kerr , Ishani Tewari
Posted on: 20/06/2014 00:00:00

Do cities grow through specialisation or diversity? This column measures specialisation and diversity for the manufacturing and services sectors in India. It finds that Indian districts with a broader set of industries exhibit greater employment growth. This is particularly true for low population densities, rural areas and unorganised sector, reflecting knowledge flow and the inclusive nature of employment growth due to diversity.
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An economic roadmap for India
Iqbal Dhaliwal , Gita Gopinath
Posted on: 30/05/2014 00:00:00
Tags:   GDP


With a new government at the Centre, there is an expectation of a revival of growth of the Indian economy. This article contends that India can return to the path of sustainable growth by investing in capital, promoting growth of industry, improving environment for doing business, prioritising fiscal discipline, and improving education and healthcare.
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Reversing premature de-industrialisation in India
Amrit Amirapu , Arvind Subramanian
Posted on: 26/05/2014 00:00:00

In countries across the world, de-industrialisation is taking place earlier in the development process. This column analyses how India fares in this regard. It finds that for most Indian states, the share of manufacturing in GDP peaked in the 90s, at levels far lower than comparable Asian countries, and began declining thereafter. Reversing this process is not going to be easy.
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Losing one half of India’s demographic dividend
Jayan Jose Thomas
Posted on: 21/04/2014 00:00:00

The working-age population in India is set to increase by more than 200 million over the next two decades. This column contends that India may fail to reap the benefits of this demographic dividend because of the extremely low rates of female participation in the workforce. There is a need for growth in job opportunities in high productivity sectors such as industry and services, particularly for women.
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The perplexing case of Gujarat
Arka Roy Chaudhuri , Ashok Kotwal
Posted on: 07/04/2014 00:00:00
Topics:   Economic Growth
Tags:   Gujarat


The common perception is that Gujarat has performed a lot better than the rest of India in terms of development, particularly in the past decade. This column demonstrates that while Gujarat has been among the top performing states in terms of output growth, the fast growth has not translated into meaningful development in the state.
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Mirror, mirror on the wall, which is the most dynamic state of them all?
Maitreesh Ghatak , Sanchari Roy
Posted on: 23/03/2014 00:00:00

This column analyses the economic performance of 16 major Indian states over the last three decades. It finds that Bihar has improved the most during the 2000s, Kerala has always been a star performer in terms of HDI, Rajasthan has achieved the maximum decline in inequality, Tamil Nadu tops in poverty reduction, and the levels and growth rates of per capita income of Maharashtra and Gujarat have consistently been the highest. However, no one state can be singled out as the top performer in the 2000s. Moreover, while Gujarat’s overall record is undoubtedly very good all through the last three decades, its performance in the 2000s does not seem to justify the wild euphoria and exuberant optimism about Modi’s economic leadership. In particular, there is no evidence of any significant growth acceleration in Gujarat in the 2000s.
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Growth, structural change, and poverty reduction: Evidence from India
Rana Hasan , Abhijit Sen Gupta
Posted on: 21/03/2014 00:00:00

Poverty reduction in India has been relatively slow even in years of high economic growth. A possible explanation is that growth has mainly been driven by sectors that generate fewer jobs for the poor. This column analyses this explanation and finds that structural change or the reallocation of jobs from low productivity to high productivity sectors, plays a key role in reducing poverty.
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Service sector growth and convergence across Indian states
Anirudh Shingal
Posted on: 17/02/2014 00:00:00
Topics:   Economic Growth


India’s success story in the services sector is well documented at the national level. However, similar literature does not exist for India’s states. This column seeks to bridge this gap by looking at India’s services growth at the sub-national level over 1980-2006. Contrary to existing literature, it suggests that services growth in India may be able to reduce income disparities across states in the long run.
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Can SMEs drive India’s growth?
Pronab Sen
Posted on: 12/02/2014 00:00:00
Topics:   Economic Growth


Investment, particularly by the corporate sector in India, drove high growth rates during 2003-2009. Given the expected slow and weak recovery of the global economy, Indian corporates are unlikely to be able to lead the process of growth revival. This column argues that under the right circumstances and with proper policies, the dynamism of the Small and Medium Enterprises sector can ensure growth rates of 7% and above.
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Understanding India’s unbalanced growth
Chetan Ghate , Peter Robertson
Posted on: 03/02/2014 00:00:00
Topics:   Economic Growth


Growing regional disparities in India are a cause for concern. But little is known about the relative importance of possible reasons for the varied growth experiences across the country. This column explores growth imbalances among Indian districts. Proximity to cities, infrastructure, degree of urbanisation and state government policies are found to be key determinants.
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Expanding productive employment in India
Mahendra Dev
Posted on: 20/01/2014 00:00:00
Topics:   Economic Growth , Jobs


While India’s relatively high growth has not entirely been ‘jobless’, employment generation has been low, and mostly in the form of informal jobs. This column examines the employment experience of India, and says that the current thinking of Indian policymakers on employment is in line with the post-2015 global development agenda. The focus is on skill development, worker productivity and social protection.
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India´s unique crisis – a short term fix
Devesh Kapur , Arvind Subramanian
Posted on: 20/12/2013 00:00:00

While the current turbulence in the Indian economy bears a resemblance to the situation of other emerging economies, it is unique when compared with historical experiences of economic crises. In their previous article, Kapur and Subramanian discussed the misdiagnosis of India’s crisis, and consequent errors in policy remedies. In this part, they outline short-term actions for reversing the growth slowdown, reducing current account deficit and preventing inflation.
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India´s unique crisis
Devesh Kapur , Arvind Subramanian
Posted on: 16/12/2013 00:00:00

While the current turbulence in the Indian economy bears a resemblance to the situation of other emerging economies, it is unique when compared with historical experiences of economic crises. In the first of a two-part article, Kapur and Subramanian discuss the misdiagnoses of India’s crisis, and the consequent errors in policy remedies. In the next part, the authors provide a short-term solution for India’s unique crisis.
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The crisis in Indian manufacturing
Jayan Jose Thomas
Posted on: 13/12/2013 00:00:00
Topics:   Economic Growth , Jobs


Manufacturing sector growth in India has fallen from over 9% to a dismal 1% in the past couple of years. This article discusses the factors that have caused a slowdown in organised and unorganised manufacturing. It contends that inadequate credit and infrastructure are key constraints, and the fate of the sector hinges on greater domestic investment and well-directed industrial policies.
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Why is Maharashtra´s average income five times that of Bihar?
Areendam Chanda
Posted on: 09/12/2013 00:00:00

Income gaps among Indian states are large, persistent and increasing over time. Differences in technology and efficiency in production processes have been found to be the primary explanation for income gaps across countries. Does the same apply to Indian states? This column attempts to answer this question, with a particular focus on Bihar – the state with the lowest average income in the country.
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Can India grow faster again?
Nirvikar Singh
Posted on: 06/12/2013 00:00:00
Topics:   Economic Growth
Tags:   recession


India’s growth prospects seem gloomy. This article argues that India can grow fast again even in the current global economic climate as it is different from other emerging economies in a number of important aspects. It recommends creating new businesses and jobs, developing internal supply chain networks, and domestic production of affordable consumer goods for reviving the growth rate.
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How can Indians be happier?
Nirvikar Singh
Posted on: 30/10/2013 00:00:00
Topics:   Economic Growth
Tags:   GDP


The recently released World Happiness Report 2013 seeks to go beyond Gross Domestic Product and the Human Development Index to understand what really matters to people for their well-being. It is found that perceived social support and the effectiveness and honesty of the government are strongly associated with citizens’ life evaluations in India.
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Why did the Indian economy stagnate under the colonial rule?
Aniruddha Bagchi
Posted on: 16/09/2013 00:00:00
Topics:   Economic Growth
Tags:   colonialism


How did the Indian economy fare under the colonial rule? Is the average Indian significantly better off after Independence? This column examines trends in GDP per capita in order to determine the standard of living in India under the British rule. It also explores the possible causes of stagnation in the Indian economy for about two centuries between 1750 and independence.
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Economists on the wrong foot
Ashish Kothari , Aseem Shrivastava
Posted on: 11/09/2013 00:00:00

This article asserts that the Sen-Bhagwati debate misses out two crucial elements – communities as agents of development, and ecological sustainability. It emphasises the importance of community empowerment, and backing community initiatives through state policies.
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Star Wars
Debraj Ray
Posted on: 05/08/2013 00:00:00

Debraj Ray gets to the heart of the growth versus redistribution debate and argues that a sectoral imbalance in growth is inevitable. While occupational choice is an important way to deal with this, it is slow and imprecise. Action on the part of the government may be critical to even things out.
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Economic growth versus social development: The spatial dimension
Ranjan Ray
Posted on: 31/07/2013 00:00:00

In the context of the economic growth versus social development debate sparked off by Bhagwati and Sen, this column argues for a more nuanced approach to assessing progress. Combining nationally representative data on expenditure and social indicators for the different states in India, it explores the spatial dimension of the country’s economic development.
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What explains the steep poverty decline in India from 2004 to 2011?
Ashok Kotwal , Pronab Sen
Posted on: 29/07/2013 00:00:00

Ashok Kotwal, Editor-in-Chief, Ideas for India, interviews Pronab Sen on the recent poverty figures that show a steep decline in poverty in India between 2004 and 2011. According to him, the shift in terms of trade in favour of agriculture and higher rural wages accelerated the trickle down of the fast economic growth to the poor.
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Turn Right or Left? Or is there a middle way?
Dilip Mookherjee
Posted on: 25/07/2013 00:00:00
Topics:   Economic Growth


Dilip Mookherjee shares his perspective on the recent Bhagwati versus Sen debate. While Sen represents the pro-state-led assistance stand and Bhagwati is seen as pro-market, what India requires is the right combination of prescriptions from both camps to effectively combat poverty.
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Recession and child labour: The poverty link revisited
Sahana Roy Chowdhury
Posted on: 01/07/2013 00:00:00

While poverty is believed to be the main cause behind child labour, higher poverty is not seen to be associated with higher child work participation rates across Indian states. This column explores the impact of recessionary income shocks on the decision of parents to send their child to work, and finds that recession exacerbates child labour only in regions with a higher cost of living.
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A case for including migrants’ remittances in inter-state comparisons
Chinmay Tumbe
Posted on: 21/06/2013 00:00:00
Topics:   Economic Growth


Gross State Domestic Product, a widely used measure to compare incomes across states in India, does not include migrants’ remittances. This column argues that remittances have a bearing on drawing valid inter-state comparisons, especially for high-remittance receiving states like Kerala, Punjab and Goa, and on deliberations on fiscal federalism.
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Underperforming even in good times
Arvind Subramanian
Posted on: 14/06/2013 00:00:00
Topics:   Economic Growth
Tags:   east Asia


The late Professor Raj Krishna´s term ‘Hindu growth rate’ was an aptly pejorative description of India´s economic performance in the post-independence period. But how has India performed in the good times, when the country´s growth turned around? This column compares India´s boom years with East Asia´s.
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Renewable energy and India’s future
Ramprasad Sengupta
Posted on: 13/05/2013 00:00:00
Tags:   energy


In the world’s second-most populous country, it is unsurprising that the topic of energy supply should be a key issue – and, in particular, its sustainability. This column completes a series on India’s energy challenges. It argues that sustainable energy supply and continued rapid economic growth of India can be compatible.
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Getting to a greener picture of India’s growth story
Varad Pande
Posted on: 08/05/2013 00:00:00

The Expert Group on Green National Accounting calls for including natural as well as human capital in our national accounts, and defining economic growth in terms of ‘wealth per capita’ instead of ‘GDP per capita’. In this Note from the Field, Varad Pande argues that this is a step in the right direction, discusses implementation issues and calls for a new robust cost-benefit rubric for new projects.
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Long term recovery of the Indian economy depends on reforms
Sarah Chan
Posted on: 24/04/2013 00:00:00

The Indian economy has been facing challenges in the form of sluggish growth, high inflation, and rising fiscal and current account deficits. This column highlights trends in the economic conditions, and outlines policy actions and reforms needed to put the economy back on track.
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Boosting shared prosperity in South Asia
Ejaz Ghani , Lakshmi Iyer , Saurabh Mishra
Posted on: 04/03/2013 00:00:00

Two-thirds of the poor in India and other South Asian countries live in the lagging regions. This column examines whether there are poverty traps that make it difficult to achieve shared prosperity, and if the current fiscal decentralisation arrangements in South Asia are working to the benefit of the poor regions. It highlights the need for shifting the locus of policy from the national to sub-national level, and from leading to lagging regions.
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Why is poverty declining so slowly in India?
Arka Roy Chaudhuri , Ashok Kotwal
Posted on: 25/02/2013 00:00:00

Despite two decades of fast growth of per capita GDP, India has experienced a very slow decline in poverty. The column suggests that this disconnect between GDP growth and poverty decline can largely be attributed to the positive feedback emanating from a skill biased growth pattern.
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Why Nations Fail – And why India and China don’t fit the story
Arvind Subramanian
Posted on: 01/02/2013 00:00:00
Tags:   China


‘Why Nations Fail’ by Daron Acemoglu and James Robinson is becoming a must-read for development economists. But this column argues that the central thesis of the book fails to explain two big development stories: those of India and China.
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Economic policy agenda for India in 2013
Dilip Mookherjee
Posted on: 02/01/2013 00:00:00

What should the priorities be for economic policymakers in India in the coming year? This column emphasises the need for greater transparency, and improved governance and regulation for reviving economic growth in 2013.
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What will South Asia look like in 2025?
Ejaz Ghani
Posted on: 19/12/2012 00:00:00
Topics:   Economic Growth


What will India and the rest of South Asia look like in 2025? This column argues that a growth miracle can quickly turn in to a growth disaster. It asks what can be done today to reshape tomorrow.
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India’s five-year plan – what’s the big deal?
Varad Pande
Posted on: 17/12/2012 00:00:00
Topics:   Economic Growth


‘Faster, inclusive, and more sustainable growth’ is the defining motto of India’s latest economic plan. But how will it work? This column outlines the five big ideas in India’s Five-Year Plan.
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South Asia’s bottom half billion
Ejaz Ghani
Posted on: 09/11/2012 00:00:00
Tags:   south Asia


South Asia has more people in extreme poverty than Sub-Saharan Africa. This column asks why such conditions continue in the second fastest growing region in the world. It argues that growth is extremely important and necessary but not sufficient for reducing poverty – policymakers need to combine it with social policies that will provide better education, healthcare, and bring about social change
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Is economic growth always the best policy?
Arvind Subramanian
Posted on: 05/10/2012 00:00:00

Is economic growth the best way to reduce poverty, raise life expectancy, and improve people’s health? This column looks at different Indian states over the last 20 years. It argues that governments that pursue economic growth cannot be accused of neglecting their social aims.
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Monetary policy in India and other developing countries
Prachi Mishra , Peter Montiel
Posted on: 03/09/2012 00:00:00

Setting interest rates and controlling inflation is an altogether different challenge in countries like India. This column argues that in many developing countries, the financial system is still too underdeveloped for monetary policy to have a reliable effect on the economy, raising doubts over several of today’s policies.
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Understanding the differing fortunes of poor people in India and China
Martin Ravallion
Posted on: 18/07/2012 00:00:00

It is no secret that India and China have both been growing impressively and that the incidence of extreme poverty has been falling. But this column shows that if India’s economic growth had been as inclusive as China’s, poverty would have reduced by twice as much over the past two decades. It argues that India is missing an opportunity if it doesn’t allow its poor to participate more fully in its rapid growth.
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