Professional Documents
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art of the decade. This in the face of WTO commitments, were not implemented.
n results for the model As a result, industrial growth recently has slumped to 2.5
e by multiplying the per cent (in 2000-01) while the scandal ridden financial
lee in the explanatory system milked by crony capitalism and poorly supervised
he 1990s (before 1995- capital market, is on the verge of a major crisis. In India,
. The estimated impact as of now, economic reforms introduced in 1991 have been
1 the negative effect of exhausted. Thus, ironically, China and India may be on
Xure investments and converging paths-to a crisis-because of the stalled
pending. Of all public financial reforms in both countries.
sector investment in In India, during the late- 1990s, economic growth rate
on private investment weakened substantially. Growth in 2000-0 1 was only 4
-
consumption or other per cent, and in the five years to 2001-02 averaged 5.25
Iinvestment growth.
mananda of Bombay In the early 1990s in India, wide-ranging structural
damaging trend from reforms had yielded notable gains, and by several
the ratio of long-term measures, India's economic performance during the
declined from 25 per decade compared favourably with China. The reforms
998-99, at the negative started the process of unshackling and opening u p the
t is, the social rate of Indian economy and resulted in a significant boost to
growth, investment, and exports, and in a market
-
-ate of growth from 3.5 reduction in poverty. Growth in the 1990s was second
~r per year, had been only to China in the region. This momentum now requires
iercial loan-financed new institutions.
investment that built The new institutional architecture will require
sports in textiles, gems independent regulatory agencies and treating of their
ors. This growth rate independence at par with an independent judiciary. It will
~f accumulating short- need also an independent monetary authority by giving
balance of payments greater independence to Reserve Bank of India on the lines
In-ing the deregulating of autonomy enjoyed by the Federal Reserve in USA or
lacities built earlier in I
the Bank of England in U.K. This will promote competition
production in public since it would end the crony capitalism that plagues India
> d and through t h e and inundates the economy with mega scandals involving
3r (now nearly 50 per insider trading and plain fraud.
]my to the end of the In the reforms initiated in 1991 the emphasis was on
rr cent average annual reforms of product markets by abolishing industrial
mm of 1993-97 could licensing and import barriers. These reforms however left
the fundamental and out multiplicity of regulations, land market distortions,
to become globally government control of banks, the factor markets such as
-national competition labour markets, capital markets, natural resources market
3mic Development Alternative Scenarios in 2020
untouched. Lack of 7 per cent a year or more over the next few years requires
[he rate required there to be implemented and which should include
)lo!ment, poverty maintaining the momentum of reforms in the SOEs and
finance sector, and developing human resources in the ,