Professional Documents
Culture Documents
AIEFS is a non-profit academic organization founded in 1975 at Bloomsburg State University, Pennsylvania
Volume 9 Issue 1
Association Objectives
Promote interest in
the study of Indian
Economics & Finance
Encourage inquiry
into, and analysis of the
problems facing the
Indian economy
Facilitate communication and discussion
among Scholars
Executive Committee
2013-2015
President
Amitrajeet Batabyal
Rochester Inst. of
Technology
Executive Director
Chandana Chakraborty
Montclair State University
Assistant Executive Director
Meenakshi Rishi
Seattle University
Treasurer
Artatrana Ratha
St. Cloud University
Elected Members
Kalyan Chakraborty
Emporia State University
Shailendra Gajanan
University of PittsburghBradford
Sudipta Sarangi
Virginia Tech
Sushanta Mallick
Queen Mary Univ. London
Bansi Sawhney
University of Baltimore
Ex-officio Member
Kusum Ketkar
This is based on *A version of this piece was also published in the Financial Express, New Delhi, on January 20,
2016.
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AIEFS Contact: Chandana Chakraborty, Department of Econ. & Finance, Montclair State University, NJ 07043 Phone: (973)-655-4125
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would mean more significant economic policy reforms than had been achieved in recent years,
according to several of the papers in the special issue.
The pure economic drivers of growth remain the same, of course, whatever the global
conditions: investment in public infrastructure, in private equipment and machinery, and in
human capital, along with innovation and adaptation to improve the efficiency of resource use
and what economists call total factor productivity. I would suggest that improvements in
organizational efficiency, in both the private and public sectors, are a vital and possibly
underestimated factor for future Indian growth. The inefficiencies in Indian management in the
left tail of the distribution have been identified in work by Nicholas Bloom and John van
Reenen. The problem of inefficiency in the public sector is more than just state capacity, but
includes organizational structures and incentives, and extends through all levels of government.
Lurking underneath all of these economic and managerial drivers of growth are two
fundamental political dangers. One political danger surfaced in the second UPA government, and
contributed significantly to Indias growth slowdown. The uncertainty about when the leadership
of the Congress party would pass effectively or officially to Rahul Gandhi undermined the thenPrime Minister, in my view, and contributed heavily to internal chaos in the national
government, with various individuals acting as if the official leadership did not matter.
Subsequently, the succession issue has been settled, but it has not led to responsible leadership,
but rather to opposition through tantrums.
A second political danger comes from the identity politics of organizations that surround
the current ruling coalition, encompassing individuals within the government as well. A situation
where classes of citizens are made to feel unsafe or unwelcome in their own country is a recipe
for economic disaster as well as being undesirable in its own right.
In a sense, these are the two biggest downside risks in Indias possible scenarios for
future growth.
In my AIEFS talk, I concluded that it seemed that the technical consensus (assuming that
political disasters are avoided) is for 7-8 percent growth in the medium term, but two prominent
economists in the audience made significant observations. Kaushik Basu suggested that a
recovery of investment rates to match the boom years could support 9 percent growth, more
optimistic than what I had described as the technical consensus. Shekhar Shah, Director of
NCAER in New Delhi, followed this up with another cogent observation: he suggested that 9
percent growth is not only feasible, but that it is necessary. Growth at 7-8 percent might well not
stave off social unrest that could be associated with a failure to create enough decent jobs for
Indias so-called demographic dividend.
The implication of this line of reasoning is that India has to grow faster than 8 percent,
otherwise it might end up growing much slower there may not be any middle ground where the
nation can muddle along, at a neo-Hindu rate of growth. In my view, this puts the political
dangers that I see in India into even starker relief. Political leadership that is based either on
personal petulance or on cultural grievance cannot provide India with the basis for accelerating
its growth rate to the 9-10 percent range that may be required for sustainability. There are dozens
of examples, across all continents, of failures in political leadership precipitating severe social
unrest and profound economic stagnation. The success stories are far fewer. Therefore, India
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AIEFS Contact: Chandana Chakraborty, Department of Econ. & Finance, Montclair State University, NJ 07043 Phone: (973)-655-4125
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may be truly at a crossroads in terms of its economic future, and underlying that, what its
political leadership chooses to do. Much will ride on those choices.
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AIEFS Contact: Chandana Chakraborty, Department of Econ. & Finance, Montclair State University, NJ 07043 Phone: (973)-655-4125
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All submissions must be accompanied by annual AIEFS membership dues for 2016 and
completed membership form. Those who are either life members or have already paid dues for
2016 are not required to pay dues with their submissions.
Annual membership fee is $40 and students are charged concessional rate of $20.
AIEFS membership form can be downloaded from the website: www.aiefs.org. Membership
dues can be paid electronically from the website. Payments by checks payable to AIEFS would
also be accepted at the address given below.
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(w):
Fax number:
8. Additional/optional willingness to discuss other papers and chair sessions (with areas of
interest and specialization)
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AIEFS Contact: Chandana Chakraborty, Department of Econ. & Finance, Montclair State University, NJ 07043 Phone: (973)-655-4125
AIEFS NEWSLETTER
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AIEFS Contact: Chandana Chakraborty, Department of Econ. & Finance, Montclair State University, NJ 07043 Phone: (973)-655-4125
AIEFS NEWSLETTER
AIEFS is a non-profit academic organization founded in 1975 at Bloomsburg State University, Pennsylvania
About AIEFS
AIEFS regularly sponsors sessions at the annual ASSA, Western Economic Association and
Eastern Economic Association meetings. It also holds biennial meetings either in the US or in
India. First biennial meeting in India was held in collaboration with t he Research and Information
System for Developing countries (RIS) in June 2009 in Delhi. The 2013 biennial meeting was
held in collaboration with the Indira Gandhi Institute of Developments Research (IGIDR) in Mumbai.
The 2015 biennial meeting has been scheduled to be held in the University of Hyderabad, Hyderabad,
India during August 3-4, 2015.
AIEFS brings out Newsletter twice a year fall and in spring. From time to time, AIEFS also
publishes edited books or proceeding of papers presented at ASSA and biennial meetings. In recent
years, papers have been published in special issues of peer reviewed journals like South Asia
Economic Journal, International Journal of Economic Policy in emerging Economies and
International Journal of Business and Emerging Markets.
For further information of AIEFS or to become a member, please visit the website:
www.aiefs.org. Or contact executive director:
Chandana Chakraborty, Ph.D.
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AIEFS Contact: Chandana Chakraborty, Department of Econ. & Finance, Montclair State University, NJ 07043 Phone: (973)-655-4125