Articles by Pulapre Balakrishnan

Growth has consistently remained a central topic in economic policy considerations of the government in India. However, there has also been a more scholarly interest in it among social scientists. As a part of the latter tradition, this paper addresses the proper delineation of the phases of growth in India, a matter of some discussion in the literature. Using state-of-the-art statistical methodology, it first establishes the trajectory of growth and then provides a theoretical explanation for that history. With data spanning the period 1950–2020, the procedure adopted is also able to assess the impact on economic growth of the policies of the present government. The results are conclusive. First, it is established that growth in India has accelerated continuously since the 1950s, implying that dynamism in the economy did not have to wait for the liberalising reforms launched in 1991. Next, the performance of India’s economy is compared to growth that has taken place in the rest of the world. It is seen that while India’s economy has, in recent years, shown a dynamism relative to the rest of the world, it has consistently fallen behind its most dynamic regions, notably in East Asia.

The electoral promise of transformational economic change had potentially played a role in the decisive victory of Narendra Modi, particularly in the 2014 general elections. In power, his government actively pursued macroeconomic stability and a business-friendly regulatory framework. However, the investment rate of the economy has actually slid, and has remained mostly at a level that is lower than what it was when the government assumed office in 2014. This outcome is interpreted as the result of the pursuit of macroeconomic stability, in the belief that it is conducive to growth, however it may be achieved.

The Economy is a worthwhile initiative that seeks to teach students about the economy, as opposed to teaching economics. The macroeconomic aspects of the textbook are critically scrutinised to understand what is being taught, and how different the treatment is from extant approaches.

Budget 2016-17 correctly recognises that the economy is facing a demand slowdown but fails to back this up with necessary expenditure to boost aggregate demand. Guided by its programme of fiscal consolidation, the government has almost frozen public investment in order to achieve the targeted deficit for 2016-17. While its proclamation to improve ordinary lives is welcome, a rearrangement of deep-rooted structures of public expenditure in India is required to achieve this.

Kerala has shown that it is possible to improve the quality of life of a people even at low levels of per capita income through efficient provisioning of public services in health and education. At the national level there has been a dramatic alteration of production possibilities achieved by intelligent public policy intervention supported by determined resource mobilisation. We now see that what is needed across India's states is a greater synergy between these two approaches.