Macroeconomics of Post-Reform India: Selected Papers, Volume I

The essays in these volumes cover practically all major macroeconomic developments in India in the process of transition from a Plan to a market oriented economy. Volume I includes papers on the overall behaviour of the economy, that is, the genesis of and lesson from the 1990-91 payments crisis that led to the adoption of a comprehensive reforms programme; the different phases of the post-reform macroeconomic development and the series of puzzles surfacing therein; the nature and sustainability of services-led growth; and the analytical-cum-policy issues relating to inflation arising from oil price or other shocks. The problems and issues addressed in the papers are diverse, and so are their focus and emphasis; but there is a unifying factor making them parts of an organic whole: their analysis draws on a macro-theoretic framework appropriate for the Indian economy. Since this framework differs significantly from the text-book model, at the beginning of Volume I the author provides a survey of the current state of mainstream macroeconomics and discusses why and how it requires some major modifications in the Indian context. Particularly important for the Indian economy, it is shown, are the significance of agriculture, infrastructural bottlenecks, absorption of labour in the unorganised sector and large scale financial dualism. Analysis based on such a framework casts new light on the main drivers of the Indian macroeconomy, underlines its major sectoral interlinkages, and helps drawing analytical and policy conclusions that are often sharply at variance with the conventional wisdom or widely held beliefs.