Post-In­de­pen­dence growth gets a fresh per­spec­tive

The Asian Age - - City - AGE COR­RE­SPON­DENT

Through their new­ly­launched book The Po­lit­i­cal Econ­omy of In­dia’s Growth Episodes, au­thors Sabyasachi Kar and Ku­nal Sen of­fer a fresh per­spec­tive on the de­ter­mi­nants of growth episodes in post-in­de­pen­dence In­dia, based on its po­lit­i­cal econ­omy.

A sus­tained growth in In­dia is im­plau­si­ble with­out keep­ing a check on the closed-door deals that in­vari­ably pro­motes crony cap­i­tal­ism, Mr Kar said at the book launch event here on Wed­nes­day.

South Korea’s rapid growth in the 1960s and 1970s and China’s eco­nomic rise in 1990s and 1970s was char­ac­terised by crony cap­i­tal­ism and high lev­els of cor­rup­tion, he said.

Dur­ing a panel dis­cus­sion at the book launch event, Naushad Forbes and Tarun Das of Con­fed­er­a­tion of In­dian In­dus­try said that some fast de­vel­op­ing economies in Asia achieved high growth rates ini­tially be­cause there were lots of prof­its to be made in the ex­port-ori­ented sec­tors.

In In­dia, most of the projects with cost over­runs are from the in­fra­struc­ture sec­tor, and are not nec­es­sar­ily linked to the man­u­fac­tur­ing or ser­vice sec­tor, Mr Das said. He ar­gued that de­lays on ac­count of land and credit avail­abil­ity and power al­lo­ca­tions es­ca­late the project cost.

“Pub­lic-pri­vate part­ner­ship is a new con­cept for In­dia. Be­tween 1947 and 1997, the in­fra­struc­ture projects were owned, con­trolled and man­aged by the gov­ern­ment,” he said.

Re­ject­ing the idea of a South Korea-like growth, Mr Sen said that the coun­try’s growth is “ex­cep­tional”, but it came as a re­sult of a “fairly au­thor­i­tar­ian sys­tem”. “In In­dia, one can’t imag­ine that,” he said.

Mr Kar and Mr Sen ar­gue that the tran­si­tion from one growth episode to an­other can be ex­plained by bi-di­rec­tional re­la­tion­ship be­tween growth out­comes and in­sti­tu­tional ar­range­ments, and by the man­ner in which in­sti­tu­tional ar­range­ments.


A man takes a bath to beat the heat in New Delhi on Wed­nes­day, the World Wa­ter Day.

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