Economics Reforms

Transition economy

India's Economic Reforms: Dismantling the Machine for Going
Jagdish Bhagwati

This paper by Jagdish Bhagwati presents a
critical appraisal of India's economic strategy
over the last five decades. According to
Bhagwati, while India's democratic success has
been outstanding, her economics has been a big
disappointment leaving the economy in a state of
economic backwardness. By 80s/ India's
economic failure became a classic case study to
lean what not to do. Recent reforms, which
signal the final discrediting of the failed ideas/
have started dismantling the past policies that
crippled India's performance. However/
Bhagwati feels that the prospects for a complete
transition still remain problematic partly on
account of the politics of coalitions at the centre
and partly because the dissent from the
supporters of India's earlier policies may create
confusion and delays.
Jagdish Bhagwati is Arthur Lehman Professor of
Economics at Columbia University, USA.
Reproduced with permission from the Times Literary Supplement, August 8, 1997.

India at fifty remains an enigma. Its huge incoherences
invite the witticism that, in India, anything and its opposite are true, m consonance with the ancient metaphysics of
India: what is, is not. V S Naipaul's conversion from an
exasperated critic in An Area of Darkness (1964) to an
admiring celebrant in India: A Million Mutinies Now (1990)
is thus to be seen, not merely as a personal journey from the shock of first recognition to the fuller understanding that
time brings, but also as his confrontation with the diversity that India maddeningly presents.
India's politics and economics underline these
contrasts, showing India to be both a success and a failure. The politics, for all its shortcomings, has been an
extraordinary success. Now that democracy has spread so
widely, it is all too easy to forget that, almost uniquely
among the newly liberated nations that entered the second
half of...
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