Dynamism with Incommensurate Development: The Distinctive Indian Model

Abstract

India’s sequencing of economic and political development has been unusual. In contrast to the West and more recently East Asia, democratization has preceded economic growth. Notwithstanding its unique path, India has grown substantially over the last four decades, pulling hundreds of millions out of poverty. The pace, durability, and stability of economic growth has been matched by few countries in the post-war period. This dynamism, though, has not been matched by development in several dimensions: a structural transformation that has skipped high-productivity manufacturing despite surplus labor, an increased spatial divergence in income despite integration in internal markets, limited convergence in education and other social metrics across castes but divergence across religions, a deep societal preference for sons that is associated with poor outcomes for women and high levels of stunting amongst children, and an environmental degradation that is severe for its level of income. The paper speculates on two immediate challenges: reviving dynamism when human capital development remains weak and the financial system is impaired and accelerating development when state capacity remains limited.

Structural Transformation of Jobs from Manufacturing to Services: Will It Work for India?

“…Dasgupta and Singh (2006) and Rodrik (2016) term this ‘premature deindustrialisation’. More recently, Lamba and Subramanian (2020) also observe similar trends for India and note that the traditional form of structural transformation of labour moving out of low-productivity agriculture in large numbers (Lewis, 1954) has still not happened in India. For a developing country like India, this implies adverse consequences for income distribution and a hinderance to its capacity for income convergence with advanced countries.…”

Productivity and job reallocation: evidence from the Indian manufacturing

“…The number of observations covered within each manufacturing industry is in the Appendix (Table A1). The study covers the years after 2008–2009 to negate the adverse impact of the Global Financial Crisis in Indian manufacturing that might bias our estimates (Subramanian and Felman, 2019; Lamba and Subramanian, 2020). Table 1 provides the yearly number of observations both in the sample and census sectors.…”

Inequality and locational determinants of the distribution of living standards in India

“…Second, India is still under-urbanized and has few large cities relative to other economies of its size (Chauvin et al, 2017). Finally, spatial differences have shown no sign of closing -for example, Lamba and Subramanian (2020) find no evidence of convergence 26 in per-capita state incomes.…”