ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Articles by M ParameswaranSubscribe to M Parameswaran

Growth Transitions in India

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.

Budget 2021–22 and the Manufacturing Sector

The growth rate of manufacturing value added has been declining continuously since 2016–17 and it had become negative in 2019–20, even before the intensification of the Covid-19 crisis, suggesting that the budget needs to address the structural weaknesses of the economy. The 2021–22 budget has largely adopted the supply side corrective measures in the form of increased capital expenditure on infrastructure. The potential of infrastructure investment in reviving the sector and the implications of the proposed resource mobilisation for financing the increased capital expenditure are discussed. In the context of increased global fragmentation of production, the feasibility of promoting domestic production through tariff protection is also discussed.

Virtuous Cycle and Economic Growth in India

A critique is offered after examining the claims in the Economic Survey that the concept of virtuous cycle is of recent origin and that during the planning period, the planners were unaware of such a way of imagining economic progress. The evidences provided to support the presence of the virtuous cycle in China and the East Asian countries are also questioned.

Economic Growth

Mudunuri Bharathi (‘Lack of Linkages’, December 8, 2007) is wrong to infer from our study that “…the sectors in the Indian economy with a sublime lack of interdependence may be performing as three unrelated engines.” Actually, our time-series econometric estimates bear out a recursive structure,...

Understanding Economic Growth in India, Further Observations

 Understanding Economic Growth in India, Further Observations Pulapre Balakrishnan, M Parameswaran The authors respond to Ravindra Dholakia

Understanding Economic Growth in India: A Prerequisite

This article follows a recent development in the estimation and testing of multiple structural breaks in linear models to identify phases of growth in India since 1950. The noteworthy feature of the methodology is that it allows the data to parametrise the model, thus yielding results that are immune to the prior beliefs of the researcher. The resulting estimates reveal that there are two growth regimes in India since 1950. The authors then decompose by sector the contribution to the change in the growth rate across these regimes. Finally, by means of a simple econometric model, they test a hypothesis that emerges from their estimation and testing for structural break in the main sectors of the economy to provide an explanation of the growth transition in India. In passing, the authors consider the bearing of their results on extant explanations of the same transition.
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