Economics

印度为何减速

Apr 30, 2013 Raghuram G. Rajan

新德里—向印度这样的穷国，用美国的话说，增长应该是“易如反掌”的。基本上，这事关公共品供给：良好的治理、生命和财产安全、公路、桥梁、港口和电站等基本基础设施，以及获得教育和基本医疗服务的权利。与其他同等水平穷国不同的是，印度已经拥有了强大的创业家阶层、规模大、教育程度高的中产阶级，以及一大批可以动员起来提供这些公共品的世界级公司。

那么，为何印度GDP增长率减得如此之慢，年率从2010—11年的10%降低到了今天的5%？2002—2012年这样的年增长率近8%的年代只是个例外吗？

我认为答案是否定的，在过去两年中出现了两个重要因素。

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0 Comments on this paragraph, 12 Comments on this article

prasad mulupuri Sep 24, 2015

Along with the big causes for slowdown that economists enumerate, we have simpler, more down to earth causes that cause slowdown .
Our hospitals are infested with rats. We spend money on big schemes for heart operations for the poor, when millions suffer from malaria, cholera etc.for lack of mosquito eradication or provision of protected water. Our judiciary shows activism but their dockets are cluttered with decades old cases.. They say there are no sufficient number of judges, but the cases get prolonged for decades because of adjournments. The quality of the judgments is nothing much to speak of. Courts are innocent of minimal management principles. Our police stations do not register complaints or cases. Girls can get raped in police stations. Our teachers do not attend schools. Our contractors build sub standard bridges. Our roads are washed away in the next rain. Our CMs dig canals years before the dam is completed with an eye on cuts from mobilization funds . One can go on adding to the list.
What global factors or Central bank policies account for such ills?
Unless we attend to these small but crucial matters, slow downs and no growths are inevitable.
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rahul srivastava Aug 7, 2013

I do not agree that the country was or is not prepared for the scale of economic growth that was on offer. Its not the financial institutions which were not mature enough - this is a direct result of the intellectual incompetence of the Indian political class.

All through 80-90s they did all they could to stop economic development and education - it works for them. uneducated population is easy to pacify and raises less questions.

I feel there is a big gap how the educated middle class looks at the situation- the get the job done approach in comparison to the political class of how to leave things as they are.

We need serious political reforms to get the wise and educated in the main stream- it does appear that the supreme court has understood the point and is making significant changes quietly.
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kiers sohn Aug 6, 2013

"the government’s inability to allocate resources such as mining rights or wireless spectrum in a transparent way led the courts to intervene and demand change. And, as the bureaucracy got hauled before the courts, it saw limited upside from taking decisions"

That's it in a nutshell. The government sabotaged it ON PURPOSE. Hopefully the son-prince of the current "family" ruling the country can undo what hath been done.

Setting up, then Undoing of obstacles is normal for India. every Indian could not be bothered. Ho Hum. buy gold.
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Jay Nair Jul 31, 2013

India imports about 1000 tons of gold (roughly 40 billion $) every year. It is the second biggest contributor to high trade deficit, after crude oil import. Gold is not contributing to the economy as it is unproductive, unless people circulate it back into the market.
My question is what has our government done to reduce the domestic demand and import of gold? This is signifcant money which could potentially make big change to the economy and investment.
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Nandita Rao Jun 22, 2013

Sir, the argument certainly has some truth in it but thats not all. Case-in-point, land acquisition for SEZs. (1) look at the geographical distribution of the proposed SEZs across india. The only outcome would be accentuated geographical divide in growth. This geographic distribution of business centres should have been more dispersed, to promote infra dev in distant areas. The geo distribution also points to the nasty game of land grab! (2) For a while, lets accept the argument that land related clearances are difficult. So alteast those projects which got such clearances must be really flourishing. Its is worthy to check out of 180 (approx) SEZs approved and land ear-marked, only a very small number has actualized. So it is not all about clearances and land titles.
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Jagan Rampal Jun 20, 2013

With due regards for Dr Rajan's viewpoint, I still think I can detect a justification of abdication of responsibilities in this article. The main tasks for any government are (1) Policy formulation (2) Marshall national resources (3) Provide governance and facilitation. If the allocation of mines, land, spectrum, or building policy framework or ensuring an enabling governance system etc is such a tough task that government can not perform it efficiently and transparently each time, the incumbent government/leaders should consider retiring. However, politicians and cricketers never retire in India even if they score ducks endlessly. Let us face it, India is being held back by poor leadership.
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Procyon Mukherjee May 1, 2013

Institutional intransigence, coupled with the polity's lack of concern to arrive at solutions that must bury the moral divide when it comes to the vital elements of country's progress, gets the better of priorities in the public arena.

The permits needed to make a proposal move from the Environment and Forest Department through an environment clearance and consent to establish and operate is a five to eight year affair if a forest is remotely involved and the conditions that are put after a clearance is given are sometimes so difficult to implement that it feels like it is better not to expand any operation.The fundamental problem then starts through land acquisition as for any growth whether it is Coal mining or infrastructure development, the incremental piece of land is just not available as the norms for making it available at a price is non-existent. Even if an industry gets a piece of land, it is not certain whether it could be put to any use as the people around that land (may not be remotely connected) would have to be appeased and till their demands are met the land cannot be even demarcated. The machinery around government land acquisition (the levers start to act from government councils at the State levels to the district levels) have perverse incentives that delay the process through upper-division and lower division clerks and any file would need to touch anything between twelve to twenty touch points, before it gets to the district level where the Collector, Sub-Collector, Additional District Magistrate, Land acquisition officer, revenue inspector, Tausildar and the Land demarcation officer are waiting to act till it progresses for registration.

The rehabilitation package even after the government machinery has stepped in would never be enough and there is hardly any way one can ensure that the 'final' word on this is ever made. The process goes on and on...

Big projects in India take more than a decade to move, if one is found to be shorter from concept to final output, it is due to sheer luck (not preparation meeting opportunity, but simply accident).
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Krishna Kumar May 1, 2013

yes, I was thinking, somewhat same reason, for a long time. I am tired of the political blame game by both NDA and UPA on each other!
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Ganesan Srinivasan Apr 30, 2013

For India to prosper, attitudes need to change. There is no leadership at the top with a long term strategic view, which educates the public and promotes healthy debate and consensus building. The general public is largely isolated from the decision making process, which is no way to build public support for any policy. And it is left to the Supreme Court to make administrative decisions, simply because the politicans and the bureaucrats have largely abdicated their responsibility. Social attitudes are also a significant drag on the economy by denying significant sections of the populations access to education, jobs and economic opportunities. But, we have to start somewhere. At least, Raghuram has outlined the key issues and a way out. We can only hope that Raghuram can convince the politicans to stick with the plan and see it through.
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Sridhar Subramanian Apr 30, 2013

My sympathy to Mr. Rajan...his article reads more like an excuse for non-performance of this Government.

The PM and this Govt. sat on law relating to land reforms for God knows how many years....

The power situation in many states, is due to the apathy of the Central Govt. and add to this the problems and scams in coal.

The 2G spectrum - the less said the better. First they do something...when questioned, they do something else and then just to excuse themselves they manipulate the actors to disprove the critics....who are they trying to fool.

The law-and-order is only to violate and benefit for the rich and the powerful.

Tax authority over-reach all the time to enable politicians get some score to extract and enrich themselves for their electoral games.

CBI mandate is only to investigate and spy on "others". No people in power to be touched...no fair investigation on anything including 2G. No fair JPC as well....

They meanwhile milk the tax from middle-class and hard-working and spend it on things that do not deserve any attention, meanwhile important planned projects can wait....and people can suffer without electricity, water and other basic necessities...

This Government needs to be taught a lesson. CEO-CM deserves a chance...to see if he can think and work like Narasimha Rao and turn-it-around for the country.
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srinivasan gopalan Apr 30, 2013

It is always a delight to dip into the pellucid thinking and incisive writing of the country's Ministry of Finance Chief Economic Advisor as his intellectual credentials are too immense to be ignored. Yet working within the system of government, it would be audacious on his part to claim that institutional incapacity continues to be a binding and besetting constraint on the further development of the country. If after six score of years of Independence, the country's politicians and bureaucrats had failed the people by their pathetic focus on short-term populism or garnering votes or aggrandising themselves with little compunction instead of pushing development, what else could be achieved now when the same set of politicans and bureacurats with whom Prof. Rajan has the misfortune to work now! Unless structural constraints and supply side bottlenecks are removed lock, stock and barrel coupled with a firm commitment to marshal more outlays for social and physcial infrastructure through purposive policy interventions, India's tryst with destiny woud at best be a work in progress in perpetuity with no tangible development in reality. One should remember in complete reverence to the perspicacity of the former Prime Minister of India Narashima Rao under whom the present prime minister Dr Manmohan Singh worked as his finance minister from 1991 to 1996 that the double-digit growth the Indian economy witnessed in the early part of the last decade became possible, despite with warts and all! It is another tragedy that the same Dr Singh at the helms could not deliver higher growth now because he was heading a viscesrally fractious coalition government with no personal authority to ensure that his writ runs and runs absolutely for the benefit of the people. Looking back with a minority government Narashima Rao brought about far-reaching economic liberalization measures that the subsequent governments including the one presently headed by Dr Singh could not even think of repeating such a feat. It is time political parties evolved a consensus in pushing for ensuring basic amenities to millions and a decent standard of living before attempting to putting the economy on a high growth trajectory. But the way politicians conduct themselves with the bureaucrats not being able to call the shots in the prevailing milieu of scams and scandals , the future is fraught unless good sense prevails for a better and decisivse governance and a salutary leadership that will not let the sink of ship of State! G.Srinivasan, Journalist, New Delhi, India
- Frank O'Callaghan May 1, 2013
  
  "after six score of years of Independence". 120 years? Really? I think not. Not quite yet!
  
  I make mistakes too. It is a shame we cannot edit our comments subsequently.
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印度为何减速

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