RES: [lbo-talk] Aspect of India's Econ Report: TheRealStateofIndia'sEconomy

Alexandre Fenelon afenelon at zaz.com.br
Thu Apr 15 16:55:43 PDT 2004


India's per capita GDP is not growing at 5% per year. During the 80s, per capita NNP grew by about 3% per annum and in the 90s by 3.5%. With population growing at 2% a year, 5% per capita growth can not be achieved at the current growth rates.

-Hmmm....but the growth seems to have accelerated to 6-8% in the last 5 years?

Indian growth follows the second pattern of uneven and skewed development. e.g. the share of agriculture in India's GDP is about 25%, though 70% of the population depends on agriculture. The growth in agriculture has slowed down considerably in recent years for a variety of reasons. Moreover, there is gross neglect of sectors such as education, health and housing. Growth is also concentrated in South and West and regions around Delhi. So a prolonged slowdown will have serious consequences, though it is hard to imagine what would cause such a slowdown.

-The growth of public debt?

I don't see how you can govern a developed nation of 1.25-1.50 bn people as one party dictatorship in the long term. How China is going to manage that transition to forms of political institutions appropriate to 21 century is hard to imagine.

-I don´t know. But is a pluralistic democracy better for China, a country -that has a long history of centrifugal forces leading to the periodic crisis -of central government collapse (just now I´m reading the Romance of the Three -Kingdoms....). To what extent a one party dictatorship isn´t better to prevent -disintegration? On the other hand, to what extent the current political system -is compatible with a more liberal economic policy?

Alexandre

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