Current Major Economic Issues
India as a prism to Asia and the World
Course No. 2952401
Instructor: Lawrence Surendra
EBA Program
Faculty of Economics, Chulalongkorn University
Introduction
INDIA: RISING ECONOMIC GIANT?
OR?
Departing radically from previously sociallyoriented policies,
India began in the 1990s to develop an openmarket economy
centered on economic liberalization,
industrial deregulation, privatization of stateowned enterprises,
and reduced controls on foreign trade and
investment.
This accelerated the country's growth, which has
averaged more than 7% per year since 1997 and hit
10% in 2010.
Services are the major source of economic growth,
accounting for 55% of output as India became a
major exporter of information technology services
and software workers.
Its 2017 GDP of $2 trillion ranks it 5th in the world
Problems remain, however.
Growth has been accompanied by
increasing joblessness and widespread
poverty and gross inequality still persist.
Widespread access to basic social
services still eludes most Indians.
Social tensions and communal
conflicts fester even as ruralurban migration continues
unabated.
Ominously, the growth figures
from 2011 appear to signal an
economic slowdown.
India is still not out of the
woods.
The Indian economy will continue to grow as a global
economic powerhouse.
India’s development through fostering economic growth has to be
seen in terms of how formidable obstacles such as widespread poverty
and one of the largest populations are handled.
While this growth is impressive, India continues to have hundreds of
millions in abject poverty and much of the economic prosperity has
been fairly localized to specific regions and sectors.
The booming software and technology sector receives daily world
attention, however those languishing in poverty remain largely
ignored.
New Developments in Artificial Intelligence and its impact on IT and
software industry
Thus, it is important to understand whether the nascent economic
prosperity has also caused an increase in income inequality.
Economic theories vary on both the causes and implications of
income equality, however empirical evidence indicates that India
has been able to maintain low income inequality during periods of
significant economic growth. Is
this true?
It is important to note, that India’s economic miracle is a recent
phenomenon and that future prospects are far from certain.
How well the Indian people and government will be able to channel
current growth into long-term prosperity remains to be seen.
To be Investigated
T.N.Ninan Business Economist –Six trends in the Indian Economy
1. “acquiring of scale”
2. “spread of connectivity and awareness”
3. “the growth of the middle class”
4. “growing problems of growth”
5. “India’s growing openness to the world”
6. “the continuing dominance of youth” – demographic advantage
INEQUALITY ISSUES ARE ABSENT
Inequality and Empowerment
Amartya Sen and Jean Dreze
It is useful to distinguish between different causes of the limitation of
democratic practice.
Given the democratic institutions, the practice of democracy may be
limited for at least three distinct reasons.
First, democratic institutions may become dysfunctional due to, say,
corruption or inefficiency. Examples include electoral fraud and the
paralysis of the legal system through case overload.
Second, there may be inadequate use of functional democratic
institutions on the part of concerned persons or groups, often due to
limited understanding or skill, and some- times even lack of motivation.
Low electoral participation, and the powerlessness of the public in the
face of complex legal proceedings, are some illustrations, among many
others.
Third: Democratic practice may indeed be thoroughly
undermined by social inequalities, even when democratic
institutions are all in place.
For instance, even if elections are technically free and fair,
their effective fairness may be compromised by the
role of money and influence in the electoral process.
This also applies to the legal system, which is often far
from impartial between different classes (even in the
absence of any corruption), if only because richer
people can afford better lawyers.
Amartya Sen and Jean Dreze
At the risk of some over-simplification, the foundations of
democratic practice may, thus, be described as
Facility (functional democratic institutions),
Involvement (informed public engagement with these
institutions),
And
equity (a fair distribution of power).
The central relevance of equity arises from the fact that a fair
distribution of power is a basic−indeed
fundamental−requirement of democracy.
Amartya Sen and Jean Dreze
The state is no longer that autonomous and increasingly the
corporate capitalist class which is also getting integrated by forward
and backward linkages to global capital is dictating to the state;
the supervision of the state by an elected political leadership, a
permanent bureaucracy and an independent judiciary; the
negotiation of class interests through a multi-party electoral system;
This remains but threatened by growing inequality which requires
other kinds of measurement
No longer a protectionist regime discouraging the entry of foreign
capital and promoting import substitution;
Diminishing role of the state in direct economic activities and
withdrawal of the state in critical areas such as education
India now stands, together with China,
as the new economic giants set to
challenge the long-running hegemony of
the West.
Can they and Asian economies duck the
global economic conditions?
While we explore India’s Economy,
Society, Culture and Politics
From a macro economic point of
view we also face a situation where
conventional economic theories do
not fully grasp the nature of global
economic changes.
The Importance of a Political
Economy Perspective
Understanding/Analysing National Economies
Going Beyond Nation States – Understanding Current
Global Affairs and Macro Economic Issues
An Attempt via an analysis of Contemporary India
Economic Growth – Trade and Development
Equity, Growth and Development
Nature/Ecology/Environment?
Good Macroeconomics requires the
development of a grounded Political Economy
Perspective