Columbia Panel: Rise of India -2/9

This is an authoritative panel discussion on the economic transformation of India by three renowned Columbia University professors: Panagariya, Bhagwati, and Varadarajan. Professor Arvind Panagariya's acclaimed book, "India: The Emerging Giant", serves a backdrop. The discussion covers (a) the Indian economic miracle, (b) forces which prevented economic transformation, (c) turnaround factors, and (d) potential challenges going forward. This lecture was delivered in September 2008 at Columbia University in New York.

PLEAES READ MY COMMENTS ON THE VIDEO BEFORE WATCHING.

Category:

News & Politics

Tags:

• Arvind
• Panagariya
• India
• The
• Emerging
• Giant
• Columbia
• University
• economic
• industrial
• transformation
• miracle
• turnaround
• revolution
• emerging
• giant
• rise
• world
• global
• power
• superpower
• Bhagwati
• Varadarajan

[KashifHKhan]

PART VII:

I would be amiss not to point out the panel's concern about inequality in Indian society. It rightly observes that for capitalism to have widespread acceptability and for growth to be sustainable: (a) there must be public perception that everyone has a "chance to make it" (irrespective of regional, caste, or communal background) and (b) extreme conspicuous consumption should be avoided (eg. Ambani's billion dollar home. How could he forget 80% of population earn < $2 per day?)

-Kashif

[KashifHKhan]

PART VI:

Finally, it is interesting to hear the panel's observations on: (a) decline in govt corruption (due to privatization of services, e-government initiative, and right to information legislation), and (b) rising global impact of India outside economic sphere (eg. in sports (cricket), literature, music, etc.). Put differently, India is no longer regarded in diplomatic circles as "respectful but inconsequential place". Rather, it is viewed as a "global power" of 21st century.

-Kashif

[KashifHKhan]

PART V:

In comparing India and China, the panel explains how India is in a better position to address its citizens' expectations via availability of publicly accessible mechanisms for translating popular wish into political action: (a) large number of NGOs (over 3 million), (b) strong judiciary, (c) independent press, and (d) opposition parties. China, by contrast, remains a totalitarian state and has yet to pay the democratic "cost" to allow channeling of popular will for stability.

-Kashif

[KashifHKhan]

PART IV:

It is worth dwelling on the causes of failure of development model prior to 1990: (a) govt involvement in every sector (wrong as there are not have enough bureaucrats or brainpower to manage everything), (b) inward looking economy (that prevented innovation and competition), and (c) reliance on public sector enterprises (which can't compete with private sector in efficiency, productivity or innovation). Surprisingly, it took 30 years for govt to figure out its model was wrong.

-Kashif

[KashifHKhan]

PART III:

According to panel, India needs to address two major challenges to sustain growth: (a) high concentration of workforce in agriculture, and (b) improvement of infrastructure to remove bottlenecks. The former requires change in labor laws (that prevent reassignment or firing of workers) to enable growth in labor-intensive manufacturing (eg. apparel, footwear). The latter requires improvement to transportation (possible within 10 years) and power systems (much harder to execute).

-Kashif

[KashifHKhan]

PART II:

Despite the ongoing turmoil in global economy and financial markets, it is interesting to hear from experts that Indian economy is expected to maintain its growth due to: (a) high savings rate (34% and 15% of GDP for general population and corporate sector, respectively, that in turn provides investment capital), (b) population becoming younger (that increases work force as well as savings rates), and (c) open economy (that encourages investment, innovation, and competition).

-Kashif

[KashifHKhan]

PART I:

I agree that economic transformation of India over past 20 years is nothing short of revolutionary. Economy has grown at 6.5% per year rate, trade over GDP ratio has reached 50%, foreign direct investment (FDI) now accounts for $25-30 billion per year, and remittances exceed $30 billion. In 1990, by contrast, growth averaged 3%, trade over GDP 15%, FDI $200 million, and remittances $300 million. India had a total of 6 mil phone lines in 1990; now, 9 mil are installed per month!

-Kashif