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4.
The Strategy for Economic Reform in a Globalised World continues....
Table 4 below brings out this by comparing East with West Germany, and North with South Korea. In India too, as the data reveal (Table 3), while India achieved a higher GDP growth under the Soviet economic strategy than that under British imperialist rule, it nevertheless remained at an unimpressive average growth rate of 3.5 per cent. Thereafter, with progressive liberalization and economic reform, the growth rate accelerated.
Thus, worldwide cross section data make for the clear inference that for fast economic development, the essential pre-conditions are democracy and market economy. To hide this fact, Leftist economists describe India’s miserable growth rate of GDP at three and half percent per year, achieved under the pre 1991 Soviet model’s Five Year Plans, as a “Hindu growth rate” that is a nation of Hindus cannot achieve a higher growth rate than that, no matter how wonderful was the Soviet System. Narasimha Rao as Prime Minister, however, demolished that myth by boldly liberalizing the economy and thus doubling the growth rate.
However, the Rao introduced reforms were ad hoc and not fundamental. They were a beneficial de-regulation in that it had helped free the Indian economy from suffocation of controls and licences. To make the economy healthy however, the nation needs today restructuring and reconstruction. We have not only to move more completely to a market economy, but we need new forms of governance of the market forces in a globalised framework that are consistent with the ethos of this ancient country. That means in tune with the enlightened Hindu cultural traditions. Otherwise, devoid of our moorings, we shall be manipulated by international forces. East Asian economies, for example, were booming in the 1980s and 1990s, but they had poor governance norms. One day in mid 1997, thenUS by manipulating the Wall Street bond market interest rates, set into motion a currency run and then a banking collapse. A major crisis resulted, from which East Asia has still to recover.
to be continued....
( This account is maintained by Har Anand Publication)