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Event Report

The Nepal Institute of International Cooperation and Engagement (NIICE) organized a lecture on Reflections on India’s Development Experience and the speaker was Amit Shovon Ray, Professor of Economics at the Centre for International Trade and Development, Jawaharlal Nehru University, New Delhi. In his remarks, Prof. Ray talked about the enormous literature available mirroring the emerging economy of India. The lecture was based on the different phases of the Indian economy.

Policy planning-driven ideology 1950-70:

At the time when India was a newly independent state from colonial rule, and wants to show the world that it can do everything that a developed nation can possibly do for its growth and development. The initial 2 five-year plan was based on the USSR development model which resembled Feldman’s model. This does not just blindly follow the socialist economy but the mixed economy, where the private sector was also encouraged and the public sector was expected to do extraordinary performances. The plan was that India should produce whatever it can, and export whatever it produces. Meanwhile, the emphasis was put more on the education and the health sector. Many public-funded institutions were established in the health sector and the education sector.

Deeper penetration of self-reliance 1970-85:

In the mid-60s India shifted its strategy, which was seen in economic policies and defense policies. In the cold war era, India started to be neutral and became a founding member of the non-allied nations. But it was seen in the later 70s that India shifts more towards the USSR for the advancement of its industrial and complex technologies (Space and Nuclear).  In this strategy of self-reliance, the policy shifted from an ideological to a capitalistic view. Now in the face of self-reliance more private sectors were encouraged to support the economy.

1985-91 Ambivalence; Sporadic Reform and 1991- A paradigm Shift

In the mid-80s, policies were again upgraded, because Indian products were not performing well in the global market due to backward technology, not up to the mark product quality, and high prices. This created a demand for change in the policy, and a demand for a technological moment came up. Now the policy was driven towards liberalization. Not much change was proposed in the existing system but only some aspects of the economy were made liberalized.

The development trajectory of India

This was not surprising that in the initial years of the Indian economy India did not act much in the progression direction, like the other Southeast Asian countries. The Labor requirement in the world was high at that time and India didn’t contribute much. So, the Asian miracle never happened for India. But the sectors in which knowledge-based industries like IT, Pharmaceuticals, etc., were the sectors where India had its growth. It was the initial emphasis on the education sector policies, which paid off for India 4 decades later when India opened up as a liberal economy to the world in 1991.

In his concluding sentence, Prof. Ray talked much about how the policies had helped to evolve the economy of India, rather than criticizing and comparing it with the growth of other Asian countries.

Prepared by Rohan Kumar Gawale, Intern at NIICE, Nepal