From Command and Control to a More Liberal Order: 1950–2018

Abstract

The chapter provides an overview of India’s economic policies and growth experience from 1951 to 2018. The period is divided into four phases: 1951–81, 1981–88, 1988–2003, and 2003–18. A command-and-control and autarkic regime led to abysmal growth during the first phase. The second phase saw a mild transition toward a liberal regime and a slight uptick in growth. Reforms began in earnest in 1991, after which growth jumped as well. The economy grew especially rapidly during 2003–12, when extreme poverty saw a sharp decline. This growth made the government complacent, however, and it returned to several socialist-era policies during 2009–14. That led to a sudden slowdown in growth between 2012 and 2014. A new government came into office in 2014 and resumed reforms, and the economy grew 7.5 percent annually during 2014–19. The chapter concludes by making a case for accelerated economic reforms.