CHINA and India have followed different patterns of development, yet they have many similarities in their approaches. China has had a head-start over India in consolidating economic gains after the reforms in 1978. As part of the economic reforms, both the countries adopted outward-looking policies, liberalised prices and dismantled regulations, fostered development of the private sector, strengthened their financial systems and opened their economies to trade and investment. Here the author feels that it is important to look back to see what one country can learn from the experiences of the other.
This book is a compilation of articles from leading scholars in India and China. They address issues like globalisation – both its governance and a historical perspective, poverty, inequality of income and the potential for conflict, agriculture, WTO and trade, the nature and characteristics of institutions and markets. The articles explore ways to improve the well-being of the poor, how to design effective structures and institutes for poverty reduction and how the reforms in their economic, political and social dimensions tackle these issues.
The insights help understand the process of reform and the mechanisms behind successful socio-economic developments. This, in turn, help increase the capability to undertake research regulated to reform in their developing and in transition economies. First and foremost, the general perception is that the socialisation approach has many economic distortions in its economic policies. The deep divide in the quality of life between capitalistic societies and socialistic ones has raised doubts about the relevance of socialist policies of the past. However, in a country like India, it was socialisation that encouraged growth of industries like Bharat Heavy Electricals, Bharat Electronics, ONGC and others to provide employment to thousands from the underprivileged section of the society. Also for any country in the formative years of its economy, there are hardly any private players to shoulder responsibilities. Moreover, the state’s socialistic path had welfare and service as the motive and not profit like the private players have. Hence at an appropriate time, the government can release all control and open the economy to private players. China could capitalise more after reforms than India by taking care of health and primary education before undertaking greater reforms. In post-Independence, India followed a socialisation pattern but with the fall of the Soviet Union, with which India had important economic linkages, India was forced to adopt economic reforms, as trade flows, had dried up.
The author of the book feels that there is need to rethink the reform process to enlarge its spread to agriculture, small-scale industry, primary health care and education. For a sustainable economic development, the quality and quantity of human capital matters far more than those of physical capital. Hence, while concluding, Sudhakara Reddy feels that India has yet to come out with the right policy priorities to suit the competitive edge it has in terms of a well-educated and healthy population to derive manufacturing successes. He suggests a happy balance with the private sector leading to investment in the productive sector and the State playing the role of a regulator
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