The vast gap between the rich and poor hits you in the eye when you visit any major city in India. It leads you to question the economic model of the country. You would also have to ask, did the economic reforms exacerbate the problem?
Blaming the problem of inequality on economic reforms alone would be unfair. The partial opening up of the economy allowed educated middle classes to command higher wages for their skills. Rampant cronyism and decades of protectionism in the Industry meant that incumbents enjoy a massive first mover advantage. Almost non-existent prosecution of corrupt politicians and bureaucrats has created a thriving plutocracy. Some say there are even signs of oligarchy in Indian businesses.
Unfortunately, opening up of the economy was not coupled with equally potent reforms in education, increased transparency in governance, improvement in the rule of law and adequate upgrades to physical infrastructure.This ensures that only a tiny minority of the country enjoy the fruits of a booming economy. It is hard to believe this would be sustainable in the coming decades.
Blaming the problem of inequality on economic reforms alone would be unfair. The partial opening up of the economy allowed educated middle classes to command higher wages for their skills. Rampant cronyism and decades of protectionism in the Industry meant that incumbents enjoy a massive first mover advantage. Almost non-existent prosecution of corrupt politicians and bureaucrats has created a thriving plutocracy. Some say there are even signs of oligarchy in Indian businesses.
Unfortunately, opening up of the economy was not coupled with equally potent reforms in education, increased transparency in governance, improvement in the rule of law and adequate upgrades to physical infrastructure.This ensures that only a tiny minority of the country enjoy the fruits of a booming economy. It is hard to believe this would be sustainable in the coming decades.
No comments:
Post a Comment