In The Media ⁽⁴⁰⁰⁾

The BJP got voted out of power not because its reforms left the poor behind--they did not--but because the success of the reforms in raising the incomes of all including the poor gave rise to a revolution of rising expectations. Read full article 24 May 2004 In India's favorite sport of cricket, fortunes change with startling speed. Indian elections, too, can be mercurial affairs. The confident Indira Gandhi, seeking to end her controversial Emergency rule and regain democratic legitimacy, was roundly defeated in 1977 by a motley crew of opposition parties. The diffident Sonia Gandhi, the leader of a seemingly lackluster Congress Party, triumphed over a Bharatiya Janata Party which believed itself to be formidable -- so formidable, in fact, that its leader called for elections earlier than he needed to, in the belief that his party's reward for domestic economic prosperity and international political success would be another term in office. What the two election surprises -- in 1977 and 2004 -- have in common is the fierce aspiration of India's masses: political in Indira Gandhi's defeat, and economic…

Politicians seeking limelight have focused disproportionately on the achievements in the information technology sector, fuelling the impression that reforms have helped only a blessed few. But this is a gross distortion of the true picture. Read full article Abstract: India's economic problems are a domestic creation. That's the word coming in from Arvind Panagariya the economics professor at Columbia University. In an exclusive chat with CNBC-TV18's Siddharth Zarabi, Panagariya said India took growth for granted and the last 10 years has been a 'lost decade'. But he also expressed hope that the economy can turnaround over the next 12 months. "My own assessment is that we are seeing a little too grim. I personally have been an optimist on the Indian economy. I feel little disheartened for sure in view of the lot of the indicators but I think in another year – year and a half you will see the turnaround happening," he says. "It is things that we did not do right in the last several years. My own thinking is that we lost almost 10 years, certainly…

Martin Wolf ("How managing growth can consign poverty to history", May 5) is right on the mark when he points out that trade openness is a necessary, even if not sufficient, condition for sustained, rapid growth. Ironically, some globalisation advocates have ended up hurting their cause by suggesting indirectly that trade openness by itself is sufficient to raise the growth rate (Letter, FT, May 10, 2004). Sir, Martin Wolf ("How managing growth can consign poverty to history", May 5) is right on the mark when he points out that trade openness is a necessary, even if not sufficient, condition for sustained, rapid growth. Ironically, some globalisation advocates have ended up hurting their cause by suggesting indirectly that trade openness by itself is sufficient to raise the growth rate. Such a suggestion is implicit, for example, in the claims, made on the basis of cross-country econometric studies, that an X per cent reduction in trade barriers will lead to a Y per cent increase in the growth rate. Critics are then readily able to counter such claims by citing numerous examples…

The recent episode of the flirtation by the ministry of finance with the idea of effectively nationalising the Infrastructure Development Finance Corporation (IDFC), resignations by seven senior executives of the corporation in response, and the subsequent backtracking by the ministry offers an unusual glimpse of the vestiges of the pre-reform-era thinking in the ministry The recent episode of the flirtation by the ministry of finance with the idea of effectively nationalising the Infrastructure Development Finance Corporation (IDFC), resignations by seven senior executives of the corporation in response, and the subsequent backtracking by the ministry offers an unusual glimpse of the vestiges of the pre-reform-era thinking in the ministry. It also illustrates graphically the discipline the reforms have come to impose on the ability of the government to reverse course. For readers who are unfamiliar with this fascinating episode, let me begin by recalling that IDFC is the largest private body devoted to infrastructure financing in India today. It was created in February 1997 to serve as a vehicle to channel private capital into commercially viable infrastructure projects and to advice…

Some influential politicians in the United States are advocating policies that threaten to repeat the mistake made by India nearly two decades ago. They argue that outsourcing is behind the massive losses of white-collar jobs in the US and would like to impose restrictions on it. But the argument is flawed. In the 1980s, when the software industry was just beginning to emerge, policy makers in India decided they would require the software firms to employ domestically sourced computers. They thought this would create a larger number of well-paid jobs in both software and hardware industries. But the policy backfired. Thanks to the poor quality of domestic computers, the software industry failed to take off. Neither hardware nor software jobs got created until after India opened up computer imports. .Some influential politicians in the United States are advocating policies that threaten to repeat the mistake made by India nearly two decades ago. They argue that outsourcing is behind the massive losses of white-collar jobs in the US and would like to impose restrictions on it. But the argument is flawed. Thus,…