Articles by Rakesh Mohan

This paper first reviews the overall macroeconomic performance in India since independence, and then assesses the likely prospects for growth in the medium term. It argues that India's growth has been largely enabled by the availability of domestic savings, which have increased steadily over the decades. Further, the efficiency of resource use has been high with a long-term incremental capital-output ratio of around 4, which is comparable to the best in the world. While private investment and corporate growth have beenmajor factors in the recent growth upsurge, it is important to note that this period has also been marked by a relative decline in public investment. A revival of public investment, accompanied by higher public savings, would be necessary to improve and expand public services.

Agricultural credit has played a vital role in supporting farm production in India. Though the outreach and amount of agricultural credit have increased over the years, several weaknesses have crept in which have affected the viability and sustainability of these institutions. Following the shifts in consumption and dietary patterns from cereals to non-cereal products, a silent transformation is taking place in rural areas calling for diversification in agricultural production and value addition processes in order to protect employment and incomes of the rural population. In the changed scenario, strong and viable agricultural financial institutions are needed to cater to the requirements of finance for building the necessary institutional and marketing infrastructure. What is needed in agriculture now is a new mission mode akin to what was done in the 1970s with the green revolution. The difference now is that initiatives are needed in a disaggregated manner in many different segments of agriculture and agro-industry: horticulture, aquaculture, pisciculture, dairying, sericulture, poultry, vegetables, meat, food processing, other agro-processing and the like.

It is expected that in the coming years, most Asian countries will undergo a similar fast-paced urbanisation that Latin America experienced in the last half century. Despite the ills that have accompanied this process of urbanisation, the world, as this article argues, appears to have coped relatively well with the large-scale increase in urban population of recent years; it is equally possible for urbanising economies in Asia to replicate the experience of developed economies. For this to happen, it is essential that all aspects of city management, including the fostering of a professionalised workforce, are strengthened. This, in turn, would increase the creditworthiness of city governments and help attract the investment necessary for vital urban infrastructure projects. In an increasingly interconnected world, decentralised governance would ideally assist the practice of prudent macroeconomic and trade policies essential for ensuring a continuous access to international capital markets.

Rapid economic growth is the only solution to the problem of poverty and such growth is not possible without significant fiscal correction. The key objective of fiscal reform has to be a reduction in public debt service payments. This article analyses data on state and central government revenues and expenditures to suggest ways to climb out of the debt trap.

Policy Issues for 1990s Rakesh Mohan During the last four decades, while the total population of India has almost doubled, urban population has nearly quadrupled