.
.
.
Modernizing the economy is good.
Updating the post-colonial Socialist economy is good, especially removing legal instruments that hinder business.
Upgrading government/governance is also essential for development. I've yet to see a country where government/governance was India poor, and yet the nation somehow successfully developed. Japan post 1945, South Korea post 1980, Singapore since 1965.....and the Soviet Union 1928--41 with 20% real annual growth rates in the last case.
Government led investment in INDUSTRY and INFRASTRUCTURE is essential. Delhi needs to lead in this area, and private INDIAN CAPITAL will follow, like sheep.
However wholesale opening up of the economy to outside predatory Capitalism (East India Company) is a very bad idea, especially given India's history.
Opening up the economy willy nilly is quite another matter, that needs to be done judiciously in consultation with local business and organizations.
Pure free trade.....especially with advanced competitive nations, which also have a strong industrial base is not a good idea.
China has a relatively closed economy, as most Indians doing business there must be aware. Nobody tells China to open up the economy. The Chinese open up selective parts of the economy, where they think they will gain advantage (i) Import of New technology (ii) Source of exports. (iii) Skills and knowledge development of local personnel. 50% of Chinese industry is still under government control.
The Chinese did not rush foolishly and 'Open Up' the economy in the manner of Russia in 1991.
Or Argentina in the 1980's
Or the East European countries after 1989.
Foreign trade represents ONLY about 14% of the Indian $5.5 trillion PPP GDP.
Thus India must be very selective, as to which countries and to what extent the country is opened to foreign trade.
_______________________________________________
India must seize chance to be top economy, IMF chief Christine Lagarde says
.
.
India has an opportunity to emerge as one of the world's most dynamic economies but it needs to implement the planned reforms and open up more fully to the world, IMF chief Christine Lagarde told TOI in an exclusive written interview.
Lagarde, who begins her India visit on Monday, praised the steps taken by PM Narendra Modi and RBI governor Raghuram Rajan to steer the economy to a higher growth trajectory and called for bringing more women into the workforce to boost growth.
The Christine Lagarde interview
"India is indeed a bright spot in the global economy, and economic developments hold much promise. I believe India has an opportunity to become one of the world's most dynamic economy, and my message during my visit here will be: seize it!," Lagarde told TOI.
The IMF chief also lauded the government's financial inclusion plan Jan Dhan and said the JAM trinity (Jan Dhan, Aadhar and Mobile) is an important step towards overhaul of the subsidy regime.
"Subsidies that are needed to help the poor often end up favouring the middle class. That is why the JAM Number trinity - Jan Dhan (bank accounts for all households), Aadhaar (unique identity for all persons) and Mobile (phone) could be a major step up in terms of direct income support to the poor," she said.
Lagarde, who is expected to meet Modi, finance minister Arun Jaitley and other key policymakers during the trip called for accelerating reforms in crucial areas.
"Further reforms to India's complex system of labour laws to encourage young job-seekers and boost presently-low female labor force participation, as well as easing of land acquisition and other clearances, will be helpful to revive the investment cycle and achieve faster growth," she said.
"Moving the economy forward in this direction would help India sustain its flight of high growth and economic stability for years to come," Lagarde said.
