India Industrialisation In A Reforming Economy

Kosaraju Leela Krishna, b. 1935, Indian economist; contributed articles.

Extension lectures delivered by the eminent economists/scholars during 1994-1998.

The year 1991 marked an important watershed in the economic history of post-Independent India. The country went through a severe economic crisis triggered by a serious balance of payments situation. The crisis was converted into an opportunity to introduce some fundamental changes in the content and approach to economic policy. The purpose of this book is to detail the structural reform process undertaken by India and to evaluate its results. In the post-liberalization period, the country has moved to a higher growth path. Objective conditions exist for the economy to grow at a sustained rate of seven per cent. The slow growth in agriculture and the consequent impact of a slower decline in poverty reduction are areas of concern.

India is the second most populous country in the world and also one of the poorest. From the late 1940s to 1980, India's per capita income grew at an average annual rate of only two percent. Expansionist economic reforms during the 1980s boosted economic growth but also unfortunately resulted in high inflation and a balance of payments crisis. As a consequence, in 1991 the government announced sweeping new changes in economic policies. Economic Policy Reforms and the Indian Economy evaluates the effects of those changes and identifies areas of the Indian economy still in urgent need of reform. After an overview of Indian economic policies and development since independence, papers focus on the country's fiscal situation, the environment for private economic activity, education, the reservation of certain activities for small-scale industry, and determinants of differentials in rates of growth across the different Indian states. Contributors include respected academic specialists on India and policy reform, high-level Indian administrators, and present and past policymakers.

India initiated liberal economic reforms in 1991 to transform a slow-growing, state-led economy into an open, export-oriented industrialising economy. Though economic growth has accelerated, industrialisation has suffered from the manufacturing sector's share and labour intensive sectors failing to improve in India's exports. The government launched the Make in India initiative in 2015 aimed at raising the manufacturing sector's share in GDP to 25 percent, and to create an additional 100 million jobs by 2022. Though official estimates show an optimistic image of small scale industries, they do not explain why India failed to boost industrial production as expected of the reforms. Why did they fail to keep the domestic market, let alone expand exports? What would it take to meet the ambitious policy goals of the initiative? This book attempts to address these questions. It looks at a series of case studies of the small industry to obtain an in-depth understanding of specific industries and locations to draw meaningful conclusions.