LIBERALISATION OF INDIAN ECONOMY

LIBERALISATION OF INDIAN ECONOMY 

Introduction

1. India was known as caged tiger
2. Potential of Indian  economy caged by populist policies
3. India waited for crisis to make structural adjustments
4. eg- gulf war and disintegration of USSR
5. Amartya Sen: there is conflict among scholars whether internal or external factors led to change of policies
1. Debate on consequences of new model
6. Bimal Jalan: good that all parties agree that there needs to be reform

Current state of liberalisation

1. Economic Survey 2016-17: remarkable transition from closed and listless economy to open and thriving economy
2. Evaluated liberalisation 
1. Openness to trade
1. More than expected
2. Openness to foreign capital
1. Normal compared to other emerging economies
3. Extent of PSUs
1. Significantly rolled public sector in sectors like civil aviation, telecom and financial services
4. Govt expenditure
1. Not very high expenditure compared to level of development
3. Since 1980, there is 4.5% per capita increase in income
4. Good achievement since under competitive democratic model
5. Policy making strained by SC
6. Ineffective redistribution, considerable miscalculation in welfare schemes

Impacts of Liberalisation

1. Montek Singh Ahluwalia: art: Economic reform a retrospective view
1. done well in some areas, neglected some areas
1. Poverty alleviation: poverty has been considerably : 323 mn in 1983--407 mn in 2004-05--269 mn in 2011-12   as per Tendulkar Committee
2. Situation of people just above poverty line is not good
3. No good system in delivering basic services like education, health, sanitation, clean drinking water
2. Not resulted into growth of employment opportunities
3. India has moved into 'middle income status'
1. Bound to face challenge if not reformed and will get stuck in 'middle income trap'
4. Suggestion
1. Tackle corruption
2. End red tapism
3. Invest in human capital
4. Reform factor market
5. Inclusion by job
6. Rehabilitate state capacity
2. Amartya Sen: 
1. Uncaging of tiger has not resulted into tiger like spirit
2. Question is overall growth pattern
3. Progress of social reforms has gone down
4. Stagnation in agriculture
5. People lack skill
6. Increase in poverty in Bimaru state
1. Problem of hunger among plenty exists
2. China invested in basic human capabilities and is taking benefits of globalisation
3. Bimal Jalan 
1. Book- Emerging India- Economics, politics and reforms
1. Reform release creative energy and productivity, but India's record in social indicators is among bottom country
2. It will be grave mistake if we don't go for critical reforms