20 years after, Indian economists analyse the repercussions of economic reforms
By Girish Kumar Dubey
Analysing the 20 years of economic reforms introduced by Manmohan Singh, former Finance Minister, Indian economists pointed out that though India has undergone massive transformation in several sectors including technology and communication, issues of poverty and corruption have hampered much of progress.
In 1991, Manmohan Singh, in his maiden budget as the finance minister under the PV Narasimha Rao-led Congress government, put forth the financial condition of the country, which stood, on the edge of bankruptcy. Immediate steps needed to be formulated and implemented. In such circumstances, Singh decided to reject the licence Raj and introduced the reforms, which have consequently, transformed the lives of millions of Indian citizens.
Economists from Benaras Hindu University in northern India suggested that the economy has witnessed massive growth, when compared to the pre-1990 period.
Anil Kumar Jain, dean of the Economics Department in Benaras Hindu University in Uttar Pradesh said that the country witnessed an enormous transformation in the past 20 years and the then finance minister, Manmohan Singh brought the country out of a major economic crisis.
"Economic reforms paved the way to massive growth. Prior to it, the condition of the country was deplorable. Our balance of payments was in a bad state. Foreign reserves were barely sufficient for the following next weeks. Since then, every sphere and sector, from every perspective, has witnessed improvement. Agricultural growth rate, which used to be negative, in 2009-10 increased despite famine in some areas," said Anil Kumar Jain, dean of Economic Department in Benaras Hindu University.
Another economist from BHU illustrated that despite the growth, the bane of corruption has cropped up in the past few years, which has caused major setbacks to the Indian economy.
"At that point in time, three important steps were taken -Foreign trade liberalization, deregulation of domestic market and privatization. The first draft written by the then Finance minister, Manmohan Singh can be summarized that he promised many things like end of inequality and unemployment, fall in the prices of commodities, and that labour exploitation would reduce. He claimed that all the sectors like agriculture; technology; transport and communication would witness progress. If we take a look at the macro indicators then surely the GDP growth has increased, poverty percentage has decreased, manufacturing and service sectors have progressed, transportation sector improved. But, a closer analysis of this scenario reveals that the problems that were present 20 years ago have increased manifold and corruption cases, not present 40 years back, are now emerging," said Professor Kiran Barman, Economic Department, Benaras Hindu University.
Meanwhile, many intellectuals noted that the condition of the marginalized has not improved and only a small number of Indian citizens are successful financially.
"The problem with looking only at the economic growth figures or the rate of growth of GDP figure is that it doesn't really talk about whether that growth has really been inclusive, whether it has created jobs, whether it has dispersed across all geographical areas in the country. This, to my mind, has been the biggest limitation, the biggest drawback of the last two decades of economic liberalization. The rich have got richer and so have the middle class, I am not arguing that the poor have become poorer but the rich have certainly got richer at a far faster pace than the poor. Therefore, the gap between the Haves and the Have-nots has widened, which is why we see the kind of inequality we do in India, where one out of four persons in the country, even the government acknowledges, lives below the poverty line. A substantial section of the population lives on barely Rs 20 day and one out of four persons in the country still cannot read or write their own name. So the flip side of economic liberalization has been a widening of economic inequality," said Paranjoy Guha Thakurta, senior journalist.
Also, economists noted that the globalisation of the Indian economy requires the domestic market to be able to compete. While some sectors like biotechnology or pharmaceuticals have been able to do so, other sectors like nuclear technology require major impetus in the form of research and development.
"Globalisation means globally competing. That means you have to generate new knowledge whether it is software, biotechnology, Nanotechnology or aerospace and nuclear technology. For instance, in nuclear technology we are still very dependent on import of technology and so we went for India US nuclear deal. We could not generate our own technology. We have also not been able to generate adequate amount of reprocessing technology and so we feel hurt when there is a ban on sending technology to India. We have not yet been developing this technology. Unfortunately in India, private sector does not do much of research. Public sector in the universities, which used to do such research, is being curtailed because the funding for them has reduced. As a result, R&D (Research and Development) has suffered in India. We are becoming dependent more on import of research and development. We are doing good work in areas like biotechnology or pharmaceuticals but by and large R&D expenditure and achievements are very few," said Professor Arun Kumar, Economics Department, Jawaharlal Nehru University, New Delhi.
Since 1991, India's GDP has increased four times, its forex reserves have surged from $5.8 billion to $279 billion, and exports from $18 billion to $178 billion. The disparity between the rich and poor, meanwhile, has widened largely for the rural people who are unable to cope up with the increasing urbanisation in cities.
Indian economists analyse the repercussions of the economic reforms, undertaken by the then finance Minister, Manmohan Singh, under the Narsimha Rao-led-Congress Government, 20 years ago.
PLEASE NOTE: THIS EDIT CONTAINS CONVERTED 4: 3 MATERIAL
NEW DELHI, INDIA (JULY 23, 2011) (ANI-NO ACCESS BBC) (ORIGINALLY 4:3)
1. BUILDINGS
2. SIGNBOARD READING 'RBS'
3. SIGNBOARDS OF BANKS
4. MEN WALKING ON THE STREET
5. SIGNBOARD READING 'TDI CITY'
6. VEHICLES MOVING ON THE STREET
VARANASI, UTTAR PRADESH, INDIA (JULY 23, 2011) (ANI-NO ACCESS BBC) (ORIGINALLY 16:9)
7. (SOUNDBITE) (Hindi) PROFESSOR ANIL KUMAR JAIN, DEAN, ECONOMICS DEPARTMENT, BENARAS HINDU UNIVERSITY, SAYING:
"Economic reforms paved the way to massive growth. Prior to it, the condition of the country was deplorable. Our balance of payments was in a bad state. Foreign reserves were barely sufficient for the following next weeks. Since then, every sphere and sector, from every perspective, has witnessed improvement. Agricultural growth rate, which used to be negative, in 2009-10 increased despite famine in some areas."
NEW DELHI, INDIA (JULY 23, 2011) (ANI-NO ACCESS BBC) (ORIGINALLY 4:3)
8. BUILDINGS
9. SIGNBOARD READING 'PNB HOUSING FINANCE LIMITED'
10. BUILDING WITH MANY BANNERS
11. SIGNBOARDS
12. SHOE SHINERS, SITTING ON A PAVEMENT
13. A SHOE SHINER SITTING
VARANASI, UTTAR PRADESH, INDIA (JULY 23, 2011) (ANI-NO ACCESS BBC) (ORIGINALLY 16:9)
14. (SOUNBITE) (Hindi) PROFESSOR KIRAN BARMAN, ECONOMIC DEPARTMENT, BENARAS HINDU UNIVERSITY, SAYING:
"At that point in time, three important steps were taken -Foreign trade liberalization, deregulation of domestic market and privatization. The first draft written by the then Finance minister, Manmohan Singh can be summarized that he promised many things like end of inequality and unemployment, fall in the prices of commodities, and that labour exploitation would reduce. He claimed that all the sectors like agriculture; technology; transport and communication would witness progress. If we take a look at the macro indicators then surely the GDP growth has increased, poverty percentage has decreased, manufacturing and service sectors have progressed, transportation sector improved. But, a closer analysis of this scenario reveals that the problems that were present 20 years ago have increased manifold and corruption cases, not present 40 years back, are now emerging."
NEW DELHI, INDIA (JULY 23, 2011) (ANI-NO ACCESS BBC) (ORIGINALLY 4:3)
15. PARANJOY GUHA THAKURTA, SENIOR JOURNALIST SITTING
16. THAKURTA LOOKING
17. (SOUNDBITE) (English) PARANJOY GUHA THAKURTA, SENIOR JOURNALIST, SAYING:
"The problem with looking only at the economic growth figures or the rate of growth of GDP figure is that it doesn't really talk about whether that growth has really been inclusive, whether it has created jobs, whether it has dispersed across all geographical areas in the country. This, to my mind, has been the biggest limitation, the biggest drawback of the last two decades of economic liberalization. The rich have got richer and so have the middle class, I am not arguing that the poor have become poorer but the rich have certainly got richer at a far faster pace than the poor. Therefore, the gap between the Haves and the Have-nots has widened, which is why we see the kind of inequality we do in India, where one out of four persons in the country, even the government acknowledges, lives below the poverty line. A substantial section of the population lives on barely Rs 20 day and one out of four persons in the country still cannot read or write their own name. So the flip side of economic liberalization has been a widening of economic inequality."
18. A BUILDING
19. SIGNBOARD READING 'ARUN KUMAR'
20. ARUN KUMAR SITTING
21. HAND OF KUMAR
22. (SOUNDBITE) (English) PROFESSOR ARUN KUMAR, ECONOMICS DEPARTMENT, JAWAHARLAL NEHRU UNIVERSITY, SAYING:
"Globalisation means globally competing. That means you have to generate new knowledge, whether it is software, biotechnology, nanotechnology, aerospace and nuclear technology. For instance, in nuclear technology we are still very dependent on the import of technology and so we went for India-US nuclear deal. We could not generate our own technology. We have also not been able to generate adequate amount of reprocessing technology and so we feel hurt when there is a ban on sending technology to India. We have not yet been able to develop this technology. Unfortunately in India, private sector does not do much of research. Public sector in the universities, which used to do such research, is being curtailed because the funding for them has reduced. As a result, R&D (Research and Development) has suffered in India. We are becoming more dependent on import of research and development. We are doing good work in areas like biotechnology or pharmaceuticals but, by and large, R&D expenditure and achievements are very few.
FILE (ANI-NO ACCESS BBC) (ORIGINALLY 4:3)
23. FORMER INDIAN PRIME MINISTER, NARASIMHA RAO, SITTING
24. FORMER FINANCE MINISTER, MANMOHAN SINGH, SITTING
25. GHULAM NABI AZAD AND MADHAVRAO SCINDIA, CONGRESS LEADERS, SITTING
26. RAO LOOKING
27. MINISTERS SITTING DURING A CABINET MEETING
28. MANMOHAN SINGH SITTING
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