Business Standard ⁽¹²⁾

Investment in human capital is likely to fail to translate into effective growth if incentives for entrepreneurs are missing Read full article It has been asserted that India neglected education, especially at the elementary level, investing too little in it in the early post-Independence decades. It is additionally claimed that the low investment in education was the reason India grew slowly during those decades. Are these critics right? One way to highlight the difficulty of achieving high per capita expenditures on education during the early decades is to ask what it would have taken to achieve the current level of per capita expenditures on education. In 2008-09, the latest year for which such an estimate is readily available (see graph), expenditure on education by all departments in the central and state governments amounted to 3.8 per cent of gross domestic product (GDP). Assuming the same proportionate expenditure in 2012-13 and recognising that per capita income that year was 5.8 times that in 1950-51, it would have taken a whopping 22 per cent (5.8 times 3.8) of GDP in the latter…

The author compares Mr Modi in Gujarat to the Congress in India Read full article Abstract: With the bid by Gujarat Chief Minister Narendra Modi for the office of the prime minister of India in full swing, attacks on the Gujarat story have intensified. Given the narrowing of the contest to one between Mr Modi and the Congress, one would expect the critics to compare the accomplishments of the former in Gujarat to the latter's nationally. But no critic would hazard such a comparison. The data leave little room for anyone to credibly question the superior performance of Gujarat in industrialisation, agricultural development and overall growth. Therefore, critics have invented the argument that thanks to its long-standing entrepreneurial tradition, Gujarat has always grown fast. But if so, why is Rajasthan not a growth powerhouse despite its legendary Marwari entrepreneurs? Attracted by the superior business environment, those entrepreneurs have in fact migrated to Gujarat. The claim that Gujarat has always grown fast also turns out to be false. A recent study by economists Archana Dholakia and Ravindra Dholakia shows that the…