India’s Post-Liberalisation Blues

Deepak Lal

Published: December 2011

This article first explains why India’s recent form of rent seeking has not damaged its growth performance. Second, it argues that India’s recent embrace of Latin American style populism could lead to a ‘growth collapse’. Third, the entitlement economy being created from the rising tax revenues of recent economic growth could lead to fiscal crises in the face of terms of trade shocks. Fourth, its failure to complete the second generation reforms particularly of the labour market, has held back the labour-intensive industrialisation needed to make use of the ‘demographic dividend’.