india Flashcards
what is the largest democracy in the world and ehy is it a rare example of a democracy?
india, it is a poor country that has managed to maintain its democracy since its independence which is unlike the sub saharan african countries
what is the key export sector in india?
service sector exports
what is an example of a economist as a politician in india?
Dr manmohan singh who was prime minsister from 2004-2014, he got a first class honours degree in economics at the university of cambridge
what was jawaharlal nehru’s economic and political philosophy?
he was influenced by marx and admired the rapid industrialisation of the soviet union. he was a committed fabian socialist and wanted a secular democratic socialist india. his target for indias economy was to initate rapid industrialisation and favoured a government led economic strategy
what was the partition of british india in august 1947?
india and pakistan was created due to the partition. there was a migration of 15 million people. 500,000 to 1 million killed in religious/ethnic violence
what were the indian intellectuals and the cambridge university connection?
a lot of famous indian intellectuals studied at cambridge university during the 50s and 60s where there was a radical keynsian tradition developed by the disciples of keynes. this tradition emphasised market failure and the need for state intervention
what was the political/ intellectual climate in 1947?
there was a post colonial view of capitalism
there was the shadow of the great depression
assumption of endemic market failures
influence of soviet model - faith in top down planning
anti-global integration - import substitution industrialisation policies endorsed - comparative advantage development
what was the focus of indias first five year plan?
the first plan of 1951-56 focused on agriculture
what was the focus on indias second five year plan?
the secon plan 1956-61 focused on heavy industry
what was the twelve plan of india focused on?
faster, more inclusive and sustainable growth
what was indias new philosphy ?
it focused on a bottom up rather than top down approach
how many deaths were caused by the bengal famine in 1943?
4 million deaths
what was the green revolution?
it was an attempt to transform agriculture with new seeds, new fertlisers, new methods such as double cropping, irrigation improvements. however agricultre in india was still underperforming with low productivity
what was a demographic factor affected economic growth>
the rapid population growth constrained indias economic growth via creating a high dependency ratio. this will lower savings ratio and capital accumulation therefore lowering economic growth
what was the permit Raj and the government failure in india?
it was an incomprehensible web of:
1. Quantitative controls
2. Import quotas
3. Tariffs
4. Industrial permits
5. Bureaucracy
6. Product & labour market regulations
it resulted in inefficiency, corruption and a relatively poor rate of growth
what did india suffer from and what was the effect of this?
a severe financial cirsis and a balance of payment crisis. it provided a opportunity for radical change as it had a pro competivieness technocracy
what influenced Raos reforms?
- Failure of ‘Permit Raj’ model
- The collapse of the Soviet style economies in 1989-91
- Success of outward oriented East Asian economies
- Success of China’s reforms after 1979
what were the policies adopted by Rao?
Deregulation, tariff reductions, reduced public sector monopoly power
what were the pro market strategy economic reforms by india in 1991?
- End of investment licensing system
- End of import quota regime except for final consumer goods
- Opened India to foreign trade and FDI
- Privatizations and competition policies
what was the source of indias comparative advantage in services?
there was a supply of educated graduates
english language spoken ( high returns in labour market to speaking english)
reduced cost of telecommunication
what are the reasons for optimism for sustaining indias growth?
Higher rates of capital accumulation
Favorable demography— ‘demographic dividend’
TFP improving
Increasing international integration
Democracy well established - but underlying tensions remain between religious groups
what are the main challenges ahead for india?
agricultural transformation - 55% of workforce in agriculture but only 15% of GDP there is a need for second green revolution and structural shift of employment
expansion of labour intensive manufacturing - currently indias exports are capital or skilled labour intensive (hecksher ohlin) , manyfacturing share remained relatively low
education - south asia contains half the worlds illiterate population
corruption
poverty reduction and inequality - huge proportion of the worlds poor live in india
need to reform labour laws - trade union aristiocraty only 10% of work force
very poor infrastructure - transportation, telecommunications and power
gender inequality -growth needs to be more inclusive
what are the enviromental problems of india?
air pollution
groundwater depletion
soil pollution
climate change
use of plastics
garbage and waste disposal
loss of biodiversity
traffic congestion
