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

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Myth and Reality

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.

 

It took a statistician to point to the role of narratives in shaping perception about reality:

You need a story to displace a story. Metaphors and stories are more potent than ideas; they are also easier to remember and more fun to read. Ideas come and go, stories stay.

— Nassim Nicholas Taleb: The Black Swan

Though we appreciate this insight into the formation of knowledge, we yet believe that statistical methods, by helping us discriminate between narratives, do have a role. In this paper, we employ one such method to discriminate between narratives on economic growth in India.

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Updated On : 13th Mar, 2021

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