New India: Reclaiming the Lost Glory offers a persuasive and data-driven roadmap for India to eliminate abject poverty, accelerate economic growth, and return to a prominent position in the global economy. Outlining a concise strategy to transform India from a primarily rural and agricultural economy to an urban and industrial economy, Arvind Panagariya highlights the importance of creating good jobs for workers with limited skills by encouraging medium andlarge firms in labor-intensive sectors.
In 1946, Baloo Lal Panagariya, then twenty-five years old, arrived in Jaipur to join the editorial staff of the newspaper Lokvani, devoted to exposing the excesses of the British and princely rulers of Rajputana. Though unremarkable in itself, the story behind this event is one of the triumph of human spirit over adversity. Baloo Lal was born in a remote village in Rajasthan, in a family that could not scrape together two full meals a day. He lost his father at five and mother at fourteen. The village lacked even a primary school. Yet, thanks to the wisdom and sacrifice of his mother and his own perseverance, he completed his education, went on to serve with distinction as a civil servant in the newly formed state of Rajasthan and, after retirement, wrote the first definitive book on the history of the freedom movement in Rajasthan. In a very real sense, Baloo Lal's journey from the village of Suwana to the city of Jaipur was a long and arduous one, much more so than that of his own son, decades later from Jaipur to Washington, DC. His success led to more milestones in the next generation, with two of his children being honoured with Padma awards and another with a presidential award. My Father: The Extraordinary Life of an Ordinary Man adds a new dimension to the history of India. It is a reminder that post-independence India was built not just by a handful of leaders working at the top but numerous ordinary citizens who shaped its many contours from below.
The subject of India's rapid growth in the past two decades has become a prominent focus in the public eye. A book that documents this unique and unprecedented surge, and addresses the issues raised by it, is sorely needed. Arvind Panagariya fills that gap with this sweeping, ambitious survey. India: The Emerging Giant comprehensively describes and analyzes India's economic development since its independence, as well as its prospects for the future. The author argues that India's growth experience since its independence is unique among developing countries and can be divided into four periods, each of which is marked by distinctive characteristics: the post-independence period, marked by liberal policies with regard to foreign trade and investment, the socialist period during which Indira Ghandi and her son blocked liberalization and industrial development, a period of stealthy liberalization, and the most recent, openly liberal period. Against this historical background, Panagariya addresses today's poverty and inequality, macroeconomic policies, microeconomic policies, and issues that bear upon India's previous growth experience and future growth prospects. These provide important insights and suggestions for reform that should change much of the current thinking on the current state of the Indian economy. India: The Emerging Giant will attract a wide variety of readers, including academic economists, policy makers, and research staff in national governments and international institutions. It should also serve as a core text in undergraduate and graduate courses that deal with Indias economic development and policies.
In its history since Independence, India has seen widely different economic experiments: from Jawharlal Nehru's pragmatism to the rigid state socialism of Indira Gandhi to the brisk liberalization of the 1990s. So which strategy best addresses India's, and by extension the world's, greatest moral challenge: lifting a great number of extremely poor people out of poverty? Bhagwati and Panagariya argue forcefully that only one strategy will help the poor to any significant effect: economic growth, led by markets overseen and encouraged by liberal state policies. Their radical message has huge consequences for economists, development NGOs and anti-poverty campaigners worldwide. There are vital lessons here not only for Southeast Asia, but for Africa, Eastern Europe, and anyone who cares that the effort to eradicate poverty is more than just good intentions. If you want it to work, you need growth. With all that implies.
In 1991, India began the process of liberalizing the economy. But it has been gradual-even import licensing (on consumer goods) was not fully removed till 2001. Between 1991 and 2023, tariff liberalization was reversed twice-first between 1996-1997 to 1999-2000 and then from 2018-2019 onwards. Anti-dumping was also used extensively to exclude the imports of specific products from the most competitive sources. Economist and chairperson of the Sixteenth Finance Commission Arvind Panagariya has closely observed the Indian economy over decades and written extensively about it. In this book, he has collected his writings from 1989 to the present day to provide an overview of the Indian economy from when liberalization started to where it has reached. The chapters in this book offer a window to the history of trade-policy changes, the factors driving them and their implications for the country's development and well-being.
India used to contribute approximately a quarter of the world's GDP until 1700 CE. As recently as 1820, this share was a hefty 16 per cent. But the Industrial Revolution shifted the centre of gravity of the global economy towards the West. The pernicious, indeed exploitative, policies of the British added to this shift by greatly impoverishing India.India's own policies during the first four decades following Independence denied it a rapid return to prosperity. But now that it has left those policies behind, opened up its economy and created a large GDP base, India can aspire to return to the prominent position it enjoyed in the global economy for so long. In The New India: A Reformer's Guide, one of the country's foremost economists, Arvind Panagariya, sets out a detailed pathway for India to regain its lost glory.
Economists and policy analysts can influence economic-policy outcomes at various levels. Those directly employed in the government can influence their other bureaucratic colleagues and politicians. They serve on important committees appointed to recommend solutions to specific policy problems. Reports of these committees can effectively strengthen the existing regime or inject new ideas for change. Economists and policy analysts outside the government can influence the thinking of politicians and bureaucrats through their writings, speeches, and media interviews. But they also influence broader public opinion. As educators in academic institutions, they shape the thinking of future generations"--
Arguments against free trade and in favor of protection have a long history when it comes to developing countries, and it is rather surprising that similar assertions have gained increasing appeal in developed countries, including the United States and Great Britain, given the clear benefits openness brings. The benefits are especially great for emerging markets. Free Trade and Prosperity offers the first full-scale defense of pro-free-trade policies with developing countries at its center. Arvind Panagariya, a professor at Columbia University and former top economic advisor to the government of India, supplies a historically informed analysis of many longstanding but flawed arguments for protection. He starts with an insightful overview of the positive case for free trade, and then closely examines the various contentions of protectionists. One is that "infant" industries need time to grow and become competitive, and thus should be sheltered. Others are that emerging markets are especially prone to coordination failures, beset by specialization and in need of diversification, and they suffer from capital-market imperfections. The panoply of protectionist arguments, including those for import substitution industrialization, fails when subject to close logical and empirical scrutiny. They do so because the costs far outweigh the benefits. Free trade and outward-oriented policies are preconditions to both sustained rapid growth and poverty alleviation in developing countries. Panagariya provides compelling evidence demonstrating the failures of protectionism and the promise of free trade, including through detailed case studies of successful countries such as Singapore, Taiwan, South Korea, China and India. Low or declining barriers to free trade and high or rising share of trade in the total income have been key elements in the sustained rapid growth and poverty alleviation in these countries and many others. Free trade is like oxygen: the benefits are ubiquitous and not noticed until they are no longer there. This important book is an essential reminder of the costs of protectionism.
The greatest strength of this thoroughly revised and expanded edition of Lectures on International Trade is its rigorous algebraic and geometric treatment of the various models and results of trade theory. The authors, who now include Arvind Panagariya, offer both policy insights and empirical applications. They have added nine entirely new chapters as well as new sections to several existing chapters (e.g., a greatly expanded treatment of the growing theory of preferential trade agreements).
Arguments for protection and against free trade have seen a revival in developed countries such as the United States and Great Britain as well as developing countries such as India. Given the clear benefits trade openness has brought everywhere, this is a surprising development. The benefits of free trade are especially great for emerging market economies. FreeÂTrade and ProsperityÂoffers the first full-scale defense of pro-free-trade policies with developing countries at its center. Arvind Panagariya, a professor at Columbia University and former top economic advisor to the government of India, supplies a historically informed analysis of many longstanding but flawed arguments for protection. He starts with an insightful overview of the positive case for free trade, and then closely examines the various contentions of protectionists. One protectionist argument is that "infant" industries need time to grow and become competitive, and thus should be sheltered. Other arguments are that emerging markets are especially prone to coordination failures, they are in need of diversification of their production structures, and they suffer from market imperfections. The panoply of protectionist arguments, including those for import substitution industrialization, fails when subject to close logical and empirical scrutiny. Free trade and outward-oriented policies are preconditions to both sustained rapid growth and poverty alleviation in developing countries. Panagariya provides compelling evidence demonstrating the failures of protectionism and the promise of free trade using detailed case studies of successful countries such as Singapore, Taiwan, South Korea, China and India. Low or declining barriers to free trade and high or rising shares of trade in total income have been key elements in the sustained rapid growth and poverty alleviation in these countries and many others. Free trade is like oxygen: the benefits are ubiquitous and not noticed until they are no longer there. This important book is an essential reminder of the costs of protectionism.
In this volume, veteran economist Arvind Panagariya compares two Prime Ministers' approach towards economic reforms-Atal Bihari Vajpayee and Manmohan Singh. He shows how the Vajpayee government was almost relentless in pursuit of reforms and enacted them in all areas, save a few. In his opinion, along with Prime Minister P.V. Narasimha Rao, Vajpayee 'must be credited with laying the foundation of the new India'. Vajpayee lost the parliamentary elections of May 2004, which led to the emergence of the Congress-led United Progressive Alliance (UPA) that ruled the country till May 2014. Although Dr Manmohan Singh, who had been the finance minister when India's economy was liberalized, served as the prime minister during both these terms, reforms came to a standstill. Social spending largely became a substitute for economic reforms. However, in its first term, the UPA did not do anything to either disrupt the prior reforms or introduce anti-growth policies. As a result, the economy grew at an 8 per cent-plus annual rate. Unfortunately, in its second term, the UPA turned outright anti-reform, taking numerous steps that eventually led to a drop in the growth rate during its last two years. Dr Panagariya analyses the reasons behind this. A book that highlights the importance of economic reforms to the public and to policymakers, An Economist's Quest for Reforms is essential reading to understand India's economic trajectory.
Reforms and Economic Transformation in India is the second volume in the series Studies in Indian Economic Policies. The first volume, India's Reforms: How They Produced Inclusive Growth (OUP, 2012), systematically demonstrated that reforms-led growth in India led to reduced poverty among all social groups. They also led to shifts in attitudes whereby citizens overwhelmingly acknowledge the benefits that accelerated growth has brought them and as voters, they now reward the governments that deliver superior economic outcomes and punish those that fail to do so. This latest volume takes as its starting point the fact that while reforms have undoubtedly delivered in terms of poverty reduction and associated social objectives, the impact has not been as substantial as seen in other reform-oriented economies such as South Korea and Taiwan in the 1960s and 1970s, and more recently, in China. The overarching hypothesis of the volume is that the smaller reduction in poverty has been the result of slower transformation of the economy from a primarily agrarian to a modern, industrial one. Even as the GDP share of agriculture has seen rapid decline, its employment share has declined very gradually. More than half of the workforce in India still remains in agriculture. In addition, non-farm workers are overwhelmingly in the informal sector. Against this background, the nine original essays by eminent economists pursue three broad themes using firm level data in both industry and services. The papers in part I ask why the transformation in India has been slow in terms of the movement of workers out of agriculture, into industry and services, and from informal to formal employment. They address what India needs to do to speed up this transformation. They specifically show that severe labor-market distortions and policy bias against large firms has been a key factor behind the slow transformation. The papers in part II analyze the transformation that reforms have brought about within and across enterprises. For example, they investigate the impact of privatization on enterprise profitability. Part III addresses the manner in which the reforms have helped promote social transformation. Here the papers analyze the impact the reforms have had on the fortunes of the socially disadvantaged groups in terms of wage and education outcomes and as entrepreneurs.
Incorporating intermediate inputs into a small-union general-equilibrium model, this paper first develops the welfare economics of preferential trading under the rules of origin (ROO) and then demonstrates that the ROO could improve the political viability of Free Trade Agreements (FTAs). Two interesting outcomes are derived. First, a welfare reducing FTA that was rejected in the absence of the ROO becomes feasible in the presence of these rules. Second, a welfare improving FTA that was rejected in the absence of the ROO is endorsed in their presence, but upon endorsement it becomes welfare inferior relative to the status quo.
The signing of the North American Free Trade Agreement (NAFTA) and recent expansions of the European Union have led to renewed efforts to create preferential trade areas (PTAs) around the world including Asia, Africa and Latin America. Because PTAs liberalize trade with union members but not the rest of the world, they are not necessarily a healthy development. By dividing the world into trade blocs, they also threaten to undermine the multilateral trading system.This collection of recently published essays by a leading critic of regionalism offers an assessment of the economic impact of PTAs on member countries and the world. The first set of essays present a theoretical analysis of the issues using simple economic models, and study the relationship between regionalism and multilateralism. Subsequent essays evaluate the role of PTAs in Asia, North America and Latin America. The general theme of the book is that, on balance, trade liberalization through PTAs is a mistake. Trade diversion, and the creation of complicated and discriminatory tariff regimes with increased tariffs for non-member countries — the consequences of PTAs — are likely to undermine the multilateral trading system.The book will be useful to academics as well as policy makers and policy analysts. Many of the essays have been featured in newspapers and journals such as the Financial Times, Economist, Journal of Commerce and International Herald Tribune. Some of these essays are already on many reading lists in the United States.
Most discussions of India's recent economic growth focus on progress and policies at the national level. But with a population of 1.2 billion, several of the states in India are larger than many of the countries in the world. Therefore, a more complete understanding of India's ongoing experiment in economic reforms requires a study at the state level. State Level Reforms, Growth, and Development in Indian States provides the first-ever comprehensive analysis of growth and reforms in the highly diverse states of the country. The authors argue that when the national government loosened its controls on industry and services, state governments began shaping the fortunes of their citizens through state-level policy reforms, resulting in faster growth in every state over the last decade than any other decade in the post-independence era. In fact, some of the poorest states, notably Bihar and Odisha, have been growing the fastest. Professors Panagariya and Chakraborty and Dr. Rao refute the common assumptions that growth has not occurred or that poverty has not been reduced in all Indian states. The recent reforms have also led to improved access in every state to basic amenities such as permanent houses, electricity, water, and sanitation. These accomplishments notwithstanding, regional inequality on a per capita basis has grown as well. The authors analyze the economic transformation that has taken place in the largest eighteen states of India and suggest reforms in areas of agriculture, industry, services and urbanization that can further accelerate this transformation. They also provide a comprehensive analysis of education and health in the states.
Regionalism is once again being viewed as a solution to the major international economic problems of our times. Slow progress of the negotiations at the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) has led some economists to conclude that a division of the world into three trading blocs -- Europe, the Americas, and East Asia, is the fastest road to multilateral free trade. They argue that negotiations for free trade are far more likely to succeed when conducted among three parties rather than among 154. For many countries, the proliferation of nontariff barriers in the industrial world has made regional integration an attractive policy option. However, the experience with South-South integration has been discouraging, and some economists claim that any temptation to promote such schemes in the future should be resisted. As for North-North integration, it has been widely successful in Europe. Intraregional trade expanded greatly, but not at the expense of trade with non-partners, which also grew rapidly. And European integration has greatly diminished, if not eliminated, the possibility of future internal conflicts. Looking to the future, North-South integration holds much promise for developing countries. Regional arrangements of this type can solidify past reforms, guarantee future access to a large market, and stimulate growth via increased direct foreign investment, more intense competition and faster technological diffusion.
Policy discourse in India tends to be dominated by assertions unsupported by facts, with the media indulging one and all without proper scrutiny. Often, the result is the creation and perpetuation of myths of all kinds. Thus, many believe today that poverty, illiteracy and ill-health afflict India because its leadership ignored them in favour of growth for its own sake; that the economic reforms that focused on growth have failed to help the poor, especially the socially disadvantaged; that any gains claimed in poverty alleviation derive from the use of progressively lower poverty lines; and that even if gains have been made, with one in two children suffering from malnutrition, reforms have done precious little to improve health outcomes. In this definitive book on economic reforms in India since Independence, Bhagwati and Panagariya decisively demolish these and other myths, which critics use as weapons to wound and maim the reforms. Using systematic data and analysis, they forcefully show that once the debris of critiques of India's reforms is cleared, it becomes evident that intensification of reforms - that allows sustained rapid growth - is the only way to lift millions out of poverty, illiteracy and ill-health. They argue that only growth can provide sufficient revenues for the provision of education and good health for the masses.
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