Some Reflections on Development Challenges of India
Indian economy started growing much before reforms of 1991. In fact, last 25–30 years have been golden age for many other developing countries. There are mainly two models of sequencing of economic development and political development. But, Indian model
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Abstract Indian economy started growing much before reforms of 1991. In fact, last 25–30 years have been golden age for many other developing countries. There are mainly two models of sequencing of economic development and political development. But, Indian model is distinctly different from other models. One model is Western Europe and North America that are now very rich and advanced countries with high standards of living and fantastic social indicators. The second model of development is of the East Asian countries that have been very successful. India belongs to neither camp in the sense that first we neither grew as slowly as those countries over long period of time nor have we grown very rapidly. This paper compares Indian model with other models and shows its uniqueness. However, this model brings up many challenges also that are discussed in this paper.
To begin with something that is actually true, not just for India but for almost the entire developing world is that the last 25–30 years have been the best of times for the developing world including India, China and other countries as well. So, whenever we think about issues like poverty, inequality and many other social indicators not doing well, one should look at all these indicators for India and for others countries as well. Per capita GDP, the level of poverty, life expectancy, infant mortality, adult mortality—all these indicators today are far better than they were 25 or 30 years ago. So in some way, this is the golden age for India, not in terms of responsibility of any one government but the cumulative effect of whats happened in the last 25–30 years. That has been true around the developing world like China and East Asia. There are This is an edited version of the valedictory addressed delivered by Dr Arvind Subramanian at an international seminar on “Development Challenges of India after Twenty Five Years of Economic Reforms” on 18 March, 2018 at Department of Economics, Banaras Hindu University, Varanasi. A. Subramanian (B) Former Chief Economic Advisor, Ministry of Finance, Government of India, Non-Resident Senior Fellow, PIIE, New Delhi, India e-mail: [email protected] Professor, Ashoka University, New Delhi, India © Springer Nature Singapore Pte Ltd. 2020 N. K. Mishra (ed.), Development Challenges of India After Twenty Five Years of Economic Reforms, India Studies in Business and Economics, https://doi.org/10.1007/978-981-15-8265-3_2
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countries in Africa, eastern Europe and Latin America which have done very well. So we call this the age of economic convergence which means that poorer countries are catching up or converging to the standard of living in the advanced economy. So in that sense, this is the best of times. Here, a small note about 25 years of economic reform is in order. One piece of fact about India which is important to remember is that why serious reforms began in India in 1991 only, in the aftermath of the crisis that we had. In fact, India’s growth took on around 1980s. We had about
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