Major economic policy debates in India from 1950s to today…

Dr YV Reddy in this speech covers some of the key policy debates in India.

He divides each decade based on a dominant policy/debate theme:

  • 1950s: Mahalanobis versus Vakil-Brahamanda Model
  • 1960s: The Devaluation of 1966
  • 1970s: Equity and Efficiency?
  • 1980s: The IMF Loan
  • 1990s: Growth and Poverty?
  • 2000s: Opening Up the External Capital Account
Nice bit.  The speech is a useful way to start a discussion on economic policy in India. Should be made part of course curriculum.
Most of us are clueless about these battles of ideas. For instance, the Mahalanobis versus Vakil-Brahamanda Model was:

While Mahalanobis strategy was influenced by post-revolution Russian industrialization experience and emphasized capital goods sector, the foundation of the
Vakil-Brahamanda model was the idea that growth could occur via transfer of surplus labour from the agricultural sector to capital goods sector even with an unchanged average consumption of wage goods. Was this debate about a choice between what matters more for growth – a capital goods constraint or a wage goods constraint? Without going into a discussion on the relative foundation of these two competing paradigms, it may not be an exaggeration to say that in terms of implementation in policy space, the Vakil-Bramhnanda strategy was a non-starter. From the vantage point of the present time, it is also interesting to note that Nehruvian vision of large-scale industrialization since the Second Plan was not exactly in consonance of Gandhian ideas of economic reconstruction in terms of a self-sufficient village economy.
Hmm.. We know about Mahalonobis but not much about Vakil-Brahmananda.
In the end:
In retrospect, one gets an impression that policy-debates in India have tended to under-estimate importance of experiences of other developing countries, and impact of global economy on Indian economy. One also gets an impression that strategies with long-term implications were less in the mainstream. It is difficult to assess the influence of thinking of political leadership on the range of issues or alternatives. I wondered why the economic ideology advanced by Swatantra Party, led by C. Rajagopalachari, that predates President Reagan and Prime Minister Thatcher, did not find a pride of place in debates on economic policy in India.
So true. We just know so little about policy debates in India and treat every event as something new…
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