Diagnosing and Addressing India’s Post-2011 Growth Slowdown

Friday, January 22nd, 2021
8:30 a.m. – 10:00 a.m. EST
WebEx

This was the fifth webinar in the “Envisioning India” series, co-sponsored by the Sigur Center for Asian Studies and the Institute for International Economic Policy. It is a platform for dialogue and debate. We invite you to engage with us in this series of important discussions.

The “Envisioning India” series is organized under the stewardship of IIEP Co-Director James Foster, Oliver T. Carr, Jr. Professor of International Affairs and Professor of Economics, and IIEP Distinguished Visiting Scholar Ajay Chhibber. The fifth event, “Diagnosing and Addressing India’s Growth Slowdown Since 2011” featured Vijay Kelkar and Ajay Shah. The talk was based on their book In Service of the Republic: The Art and Science of Policy-Making in India, named a Top 20 Book of 2020 by Bloomberg. Ashima Goyal from IGIDR and Devesh Kapur from SAIS provided discussant remarks. The discussion was moderated by Professor James Foster, with an introduction by Dr. Ajay Chhibber.

India’s GDP has crashed in 2020 due to the pandemic – but it was showing a decline even before that. Private investment surged in India from 2003 to 2012, and has declined thereafter. In 2020 rupees, the stock of under implementation private projects has dropped from Rs.83 trillion in 2012 to Rs.35 trillion today. The most important puzzle in Indian economics today consists of diagnosing and addressing the disenchantment of the private sector, the change in conditions when compared with the high growth of the 1991-2011 period. Most GDP growth, and almost all jobs, are made when private persons choose to invest in building firms. What happened to the promise? Where have we faltered? How do we change course? How do we overcome the dangers of the middle-income trap and get rich before we grow old? What do we need to do to make our tryst with destiny?

This requires going back to first principles, in public economics and public administration, to rethink the foundations of public policy in India, to rethink the concept of the Indian state and its engagement with private persons. Vijay Kelkar and Ajay Shah wrote an ambitious book, “In service of the Republic: The art and science of economic policy“, around these questions.

About the Authors:

Vijay Kelkar served the Government of India as petroleum secretary, finance secretary and chairman of the Thirteenth Finance Commission of India. He also served as director of the United Nations Conference on Trade and Development (UNCTAD) and as executive director of the International Monetary Fund. In 2011, the President of India conferred the Padma Vibhushan upon him. He has a masters from the University of Minnesota and a PhD from the University of California, Berkeley.

Ajay Shah has worked at the Centre for Monitoring Indian Economy, the Indira Gandhi Institute for Development Research, the Ministry of Finance and the National Institute of Public Finance and Policy (NIPFP). His areas of research include economics, law and public administration. He has a BTech in aeronautical engineering from IIT, Bombay, and a PhD in economics from the University of Southern California, Los Angeles.

About the Discussant:

Ashima Goyal, professor IGIDR, Mumbai, is widely published in institutional and open economy macroeconomics, international finance and governance, edits a Routledge journal, has received many fellowships, national and international awards, is active in the Indian public debate with a monthly column at Hindu Business Line, and has a served on several boards and policy committees including the Prime Minister’s Economic Advisory Council. Currently she is a member of the Monetary Policy Committee of India’s Central Bank.

Devesh Kapur, is the Starr Foundation South Asia Studies Professor and Director of Asia Programs at the Paul H. Nitze School of Advanced International Studies (SAIS) at Johns Hopkins University. His recent books include Navigating the Labyrinth: Perspectives on India’s Higher Education; The Other One Percent: Indians in American; Rethinking Public Institutions in India, The Costs of Democracy: Political Finance in India and Regulation in India: Design, Capacity, Performance. Prior to joining Johns Hopkins, he held appointments at the Brookings Institution, Harvard University and University of Pennsylvania. He holds a B. Tech in Chemical Engineering from IIT (BHU) Varanasi; an M.S. in Chemical Engineering from the University of Minnesota; and a Ph.D. in public policy from Princeton.