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DP4371
From 'Hindu Growth' to Productivity Surge: The Mystery of the Indian Growth Transition
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Publication Date:
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April 2004
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Link to this Page:
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www.cepr.org/pubs/dps/DP4371.asp
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Most conventional accounts of India’s recent economic performance associate the pick-up in economic growth with the liberalization of 1991. This Paper demonstrates that the transition to high growth occurred around 1980, a full decade before economic liberalization. We investigate a number of hypotheses about the causes of this growth – favourable external environment, fiscal stimulus, trade liberalization, internal liberalization, the green revolution, public investment – and find them wanting. We argue that growth was triggered by an attitudinal shift on the part of the national government towards a pro-business (as opposed to pro-liberalization) approach. We provide some evidence that is consistent with this argument.
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