CONFRONTING CONTRADICTIONS IN THE INDIAN ECONOMY: AN EVALUATION OF THE PAST - POLICIES FOR FUTURE INVESTMENT AND GROWTH by

The first part of this paper provides a broad evaluation of the performance of the Indian economy (including cross country comparisons) and highlights the economic crisis faced by India in June, 1991. This crisis proved to be a turning point for the economy, providing the impetus for the initiation of revolutionary though studied and pragmatic economic reforms by the then Congress government. A brief discussion of the economic reforms is provided. Review of the relevant literature emphasizes the importance of physical capital as a necessary, though not sufficient condition for sustained economic growth. This on the one hand, and given the intense global rivalry to attract private investment on the other, the chapter is primarily devoted to a discussion of investment-fostering policies. Other glaring gaps remaining in India’s liberalization program relating to education, employment, poverty and inequality (both sectoral and regional), which need to be urgently addressed, are also highlighted.