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South Asia

India, China and our growth forecasts

Kaushik Basu's picture

Last month, the World Bank and IMF both put out predictions that, this year, India would overtake China in terms of GDP growth rate. This caused a flutter and was widely reported around the world. How robust is this prediction and what does it really mean?

First, this is not as monumental a milestone as some commentators made it out to be. China has had one of the most remarkable growth runs witnessed in human history, having exceeded an annual growth of 9% from 1980 to now. Four decades ago its per capita income was close to India’s, but now it is four times as large as India’s. None of all this is going to change in a hurry.

With this caveat in mind, it is a year in which India deserves to feel good. It is expected to top the World Bank’s chart of growth rates in major nations of the world. This has never happened before. Before 1990, India did occasionally grow faster than China, mainly because China’s growth gyrated wildly during the pre-Deng Xiaoping period. It was, for instance, minus 27% in 1961, when Mao Zedong’s Great Leap Forward resulted in the world’s biggest famine, and it was 17% and 19% in 1969 and 1970, respectively--a relief in the wake of the Cultural Revolution. Fluctuations of this magnitude would be intolerable to India’s polity.

At the current rate, female participation in India’s labor force is unlikely to increase

Janneke Pieters's picture
Despite rising economic growth, fertility decline, and rising wages and education levels, married women’s labor force participation in urban India has stagnated around 18% since the mid-1980s. In a recent paper, we investigate what can explain this stagnation of female labor force participation (FLFP).

Building feedback into project implementation: A visit to the Social Observatory

Ken Chomitz's picture
“Do you decide on what types of clothes to wear based on your own preferences?”  That’s a question on a survey instrument designed to assess whether Tamil Nadu’s Empowerment and Poverty Reduction Project (part of the Pudhu Vaazhvu Project or PVP) is actually having an impact on women’s empowerment. The question resonated strongly with the project beneficiaries I met. For them, it was a touchstone indicator of empowerment. That may be because it was crafted by a group of the women for whom the project is designed. 
 

Love, money, and old age in China

L.Colin Xu's picture
Love is supposed to be pure and unconditional. A recent study by Ginger Jin, Fali Huang and I suggests that love is complicated: the amount of love achieved may depend on whether you or your parents found your spouse, and whether you are part of a family where old age support needs to be provided by children.

The Social Observatory Field Notes: Documenting the stories of Self-Help Group (SGH) leaders

Shruti Majumdar's picture

Location: Sarfuddinpur, Bihar
December 2014
 
In June this year, I was in Sarfuddinpur, a village in Muzaffarpur district in north-central Bihar. This was my tenth round of qualitative data collection in this village and I wanted to document the stories of a few Self-Help Group, or SHG, leaders; Shakuntala Devi was one of them. I first observed her presiding over an SHG meeting under the village peepal tree in July 2013. She was expertly facilitating a discussion with other SHG members around loans, but also around child health issues and the challenges faced by women in the marketplace. She disciplined free riders and rewarded contributors with a respected leader’s ease. Since then, I have seen her conduct many other meetings.
 

How to Reverse the Post-Crisis Slowdown of Growth in Emerging Economies?

Aristomene Varoudakis's picture
Growth in emerging economies has slowed over the past three years, something being discussed with urgency at the G20 meetings in Istanbul, Turkey. Part of the slowdown is cyclical, but a significant part reflects sluggish potential growth. Using new empirical evidence, this column argues that ambitious structural reforms can fully offset the slowdown of potential growth in emerging economies. Reforms that remove barriers to open markets and improve access to finance play a key role in revitalizing total factor productivity growth and boosting private investment.

Bhutan – Development Economics in the Himalayas

Kaushik Basu's picture

Landing at Paro in Bhutan involves making a question-mark shaped maneuver while dropping altitude rapidly to avoid making wing-contact with the Himalayan mountains surrounding the Paro valley where Thimphu, the capital, is also situated. A fellow passenger informs me that there are only 9 pilots in the world who are trained to make this landing. I use up one of my rare prayers to request that it be one of those flying us now. It is, I think, the infrequency of prayers that makes them so effective; our plane descends smoothly and tiptoes on to the tarmac.

Voting with their feet? Access to infrastructure and migration in Nepal

Forhad Shilpi's picture

Do migrants respond to differences in access to public goods and services in addition to income prospects of potential destinations?  This issue is important in developing countries where provision of basic public goods affects not only income prospects but also quality of life. And in these countries, provision of public goods tends to vary widely across areas.  In a Tiebout (1956) sorting model, such disparity in the provision of public goods such as roads, electricity, schools, hospitals, etc. should induce people to "vote with their feet" and to migrate to areas with better access to these infrastructures and services.

India's Moral Churning -- Excerpts from August 16 Tata Lecture, Delhi

Kaushik Basu's picture

Revised excerpts from the 16th JRD Tata lecture, delivered in New Delhi, 19 August 2013.

This is a difficult time for the Indian economy. Growth has slowed, with industry shrinking over the last two successive months, wholesale price inflation has risen to 5.8%, and the rupee has been losing value sharply. There is reason to be upset about this and to demand more from policy makers. Yet, as I argue in this lecture, this is not India's biggest problem. The nation's biggest challenge at this critical juncture is a moral and an ethical one. This, for India, is a moment of moral churning. Skullduggery and corruption, cutting across party lines, have been rampant, eating into the moral fabric of the nation, leaving ordinary people befuddled and in despair. This is breeding a corrosive cynicism, leading people to believe that maybe this is the only way to be, that petty corruption and harassment is simply the new normal, whereby we should complain when we are left out of the gravy train and merrily join in if and when we get a foothold on that train. Yes, the economy has not done well over the last year or two. But once we look beyond the proximate causes we will realize that one important factor for the economy not doing well is the corrosion of values like trust and trustworthiness and their concomitant, poor governance.

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