Advanced Search
MyIDEAS: Login

Investment and growth in India under liberalization: Asymmetries and Instabilities

Contents:

Author Info

  • Mazumdar, Surajit

Abstract

This paper makes the case that the growth trajectory of the Indian economy in the post-1991 liberalization period is characterised by an inherent source of instability in manufacturing and industrial growth that distinguishes this period from the 1980s. This instability is a result of an investment-growth asymmetry that flows from a combination of a services-intensive growth pattern and a manufacturing-intensive investment pattern. These in turn reflect the pattern of demand expansion within the domestic economy as well as in external markets and also the reliance on private corporate investment as the driver of the economy’s investment process. In such ircumstances, the maintaining of the balance between capacity creation and demand expansion in the manufacturing sector becomes impossible. Investment is thus prone to a high degree of instability, which through its effects on demand, also makes industrial growth highly unstable. The services-intensive growth trajectory after 1991 is, therefore, more correctly viewed as one which is unable to fully utilize the capital accumulation potential of the economy rather than as a trajectory cheap in the use of capital. Correcting this problem however requires measures that are inconsistent with a liberalized economic policy regime.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://mpra.ub.uni-muenchen.de/19629/
File Function: original version
Download Restriction: no

Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 19629.

as in new window
Length:
Date of creation: Mar 2008
Date of revision:
Publication status: Published in Economic and Political Weekly No. 49.XLIII(2008): pp. 68-77
Handle: RePEc:pra:mprapa:19629

Contact details of provider:
Postal: Schackstr. 4, D-80539 Munich, Germany
Phone: +49-(0)89-2180-2219
Fax: +49-(0)89-2180-3900
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC

Related research

Keywords: investment; growth; India; liberalization;

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Dani Rodrik & Arvind Subramanian, 2004. "Why India Can Grow at 7 Percent a Year or More: Projections and Reflections," IMF Working Papers 04/118, International Monetary Fund.
  2. T. N. Srinivasan, 2005. "Comments on "From 'Hindu Growth' to Productivity Surge: The Mystery of the Indian Growth Transition"," IMF Staff Papers, Palgrave Macmillan, vol. 52(2), pages 229-233, September.
  3. Rodrik, Dani & Subramanian, Arvind, 2004. "From "Hindu Growth" to Productivity Surge: The Mystery of the Indian Growth Transition," Working Paper Series rwp04-013, Harvard University, John F. Kennedy School of Government.
  4. Jesus Felipe & Franklin M. Fisher, 2003. "Aggregation in Production Functions: What Applied Economists should Know," Metroeconomica, Wiley Blackwell, vol. 54(2-3), pages 208-262, 05.
  5. E. Abdul Azeez, 2002. "Economic reforms and industrial performance: An analysis of capacity utilisation in Indian manufacturing," Centre for Development Studies, Trivendrum Working Papers 334, Centre for Development Studies, Trivendrum, India.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Mazumdar, Surajit, 2012. "The State, Capital and Development in ‘Emerging’ India," MPRA Paper 36413, University Library of Munich, Germany.
  2. Suranjana Nabar-Bhaduri & Matías Vernengo, 2012. "Service-led growth and the balance of payments constraint in India: An unsustainable strategy," Working Paper Series, Department of Economics, University of Utah 2012_06, University of Utah, Department of Economics.
  3. Mazumdar, Surajit, 2011. "Continuity and Change in Indian Capitalism," MPRA Paper 38907, University Library of Munich, Germany.
  4. Mazumdar, Surajit, 2010. "On the Sustainability of India’s Non-Inclusive High Growth," MPRA Paper 28163, University Library of Munich, Germany.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:19629. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.