http://news.bbc.co.uk/2/hi/south_asia/6195617.stm
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Professor Stiglitz said that India also gained by its investments in sectors of higher education, which helped the country to reap the benefits of the information technology revolution.
The Indian infotech industry is expected to exceed $36bn in revenues this fiscal year, a growth of nearly 28% over last year. Export earnings contributed to 64% of the revenues.
On the other hand, he felt that that external liberalisation had "exposed India to inequalities of the global trading system".
The large number of debt-ridden cotton farmers taking their lives across India is "clearly related" to the American agricultural subsidies that depress prices and make cotton farmers elsewhere worse off, Professor Stiglitz said.
Asked if India could face a economic meltdown of the kind experienced by Brazil and Argentina in the past leading to political and social instability, Professor Stiglitz turned his attention to the dangers posed by "excessive" liberalisation of capital markets.
"Much of the volatility in the 1990s in Latin America was related to capital markets instability. The poor took the brunt of the [meltdown] and bore the cost," he said.
"The bottom-line is, that India has so far avoided that kind of extremes."
But Professor Stiglitz warned that if the country liberalised its capital markets "rapidly, it would expose itself to the kind of volatility" which led to downturn and instability in Latin America.
Environmental impact
More importantly, he said one of the main threats to India's growth came from the increasing threat to the environment caused by "resource-intensive" growth.
"There are going to be more cars, houses, roads in the present pace of development. It is very natural. But all this is also very resource-intensive."
"The environmental impact of such resource intensive growth can be substantial given India's very large population. This can begin affecting living standards," he said.
Professor Stiglitz said India had not managed its farm sector properly - water, he said, was already a precious commodity in large parts of the country where the water table was falling.
"[In this respect] India is living on borrowed time," he said.
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