Growth and Development under Alternative Policy Regimes in India: A Political Economy Perspective

Abstract

This paper reviews the economic policies adopted by the Indian government under different policy regimes, provides a political economy perspective of economic growth in the country during 1950–2020 and examines the inclusiveness of the rapid economic growth in recent decades. The growth performance of the economy improved as the economy moved from inward-looking policy regime to the regimes of pro-business and pro-market policies. India’s political economy was supportive of the changes in policy regime. After growing at a sluggish rate during the first three decades after 1950–1951, the gross domestic product (GDP) growth accelerated significantly after the pro-business reforms in the 1980s, and there was further acceleration after the pro-market reforms since 1991–1992. It has, however, slowed down in recent years. Nevertheless, it has not been inclusive, as the benefits of growth have not reached all sections of the population and all regions of the country equally. On the contrary, disparities in income across regions and inequalities in income, wealth and consumption among individuals have exacerbated, and the problems of unemployment and poverty have been persisting in the economy.