Author: Kaliappa Kalirajan, ANU
Developing countries embark on economic liberalisation to close the gap between their potential and actual economic performances. Liberalisation measures are aimed at eliminating structural and institutional rigidities which are a drag on economic performance, promoting export growth and attracting greater flows of FDI. Success induces further structural change through technology transfer, and sustains the overall economic performance of an economy. The outstanding example of this is the case of China.
Critics argue that liberalisation leads to increased inequality, which at times may even aggravate absolute poverty among some groups in certain regions. Read more…
Author: Kaliappa Kalirajan
Though India has demonstrated that there exists broad political support for its economic reform program, agricultural trade policy reforms need to be accelerated. The new government enjoys a better standing than before in terms of stability. Its challenge now is to mitigate the inefficiency that exists in Indian agriculture and to close the gap between its potential and actual performances by implementing a proper policy framework.
As a net exporter in agriculture products, India has more to gain than to lose from trade reforms. It has sufficiently high bounded rates on most products, and therefore flexibility can be ensured against unfair competition. It does not have to worry about its agricultural subsidies as they are already below the required ceiling. Also, it does not have any serious domestic opposition to reckon with. All of these factors place India in an advantageous position.
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Author: Kaliappa Kalirajan
Researchers and policy makers around the globe refer to the ‘East Asian Miracle’ from time to time. Though India is historically influential, it is taking longer for the country to achieve its potential in the economic arena, after being on the top of the world long ago.
A leading economic historian, Professor Angus Maddison, has shown that about 30 per cent of world GDP (measured in terms of US dollars in 1990) was produced in India before 1500 A.D.
India was the centre of the world up to this point, followed by China. And the World Bank in its April report argued that China and India are once again the drivers of the global economy.
As the saying goes ‘history repeats itself’. It is time now for India to accelerate growth to catch the position it fell from some 500 years ago. Acceleration is occurring, but how significant is it? Are the signs of acceleration visible even during this period of gloomy financial crisis?
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