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India: Bad Economic Management from a Democratic Government

India: Bad Economic Management from a Democratic Government

Chapter:
(p.197) Chapter Eight India: Bad Economic Management from a Democratic Government
Source:
The Power of Productivity
Author(s):
William W. Lewis
Publisher:
University of Chicago Press
DOI:10.7208/chicago/9780226477008.003.0008

This chapter presents an analysis of the Indian economy. It is vital that in order to understand today's global economic landscape India is examined in detail. One billion people live there. Within this decade India in fact will pass China as the world's most populous country. The majority of people in India live in desperately poor conditions not seen anywhere in advanced economies and rarely in Brazil and Russia. There is only one source of meaningful change in India's economic situation, the modern sector. Its productivity ought to be much closer to 100 percent of U.S. productivity than it is. However, India's government appears to be trying to control the economy. It is not trying to control through central planning by telling everybody what to do. It is trying to control through regulation by telling everybody what they cannot do. This regulation has the result of distorting and diminishing competition.

Keywords:   Indian economy, poverty, productivity, macroeconomic policy, modern sector, central planning, competition

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