India's Search for Prosperity

• Author: Vijay Joshi
• Published date: 01 June 2018
• Date: 01 June 2018
• DOI: http://doi.org/10.1111/1467-8462.12263

India’s Search for Prosperity

Vijay Joshi*

Abstract

What should India do to become a prosperous,

high-income country within the next 25 years?

In this Corden Lecture, I argue that India needs

‘more of the market’as well as ‘more of the

state’, each in its proper domain. This theme is

elaborated by identifying and examining the

following problem areas in India’s economic

landscape: dysfunctional subsidies and ineff‌i-

cient redistribution; labour market distortions

and the employment problem; ineff‌icient

public-sector enterprises; poor quality of

primary education; and weakness of state

capacity. The lecture ends with some ref‌lec-

tions on India’s democratic system, which

provides the setting in which economic reform

has to be implemented.

1. Introduction

Max Corden is one of the world’s leading

thinkers in the f‌ield of international economics

as well as an outstanding teacher of the subject.

And on a personal note, he has been my friend,

philosopher and guide for the past 50 years.

I am delighted and honoured to deliver a lecture

that bears his name.

My subject today is the past and future

economic career of India, the world’s most

populous democracy. I shall begin with a

broad-brush sketch of India’s economic per-

formance since it became independent in 1947.

I shall then consider what India needs to do to

join the ranks of high-income countries by

the end of the next quarter century. This

objective is ambitious but achievable. If

attained, it would better the lives of hundreds

of millions of people, and signal the ability of a

poor country to do so without sacrif‌icing

democracy, the rule of law and personal

freedoms. I shall conclude with some brief

remarks about Indian democracy, which pro-

vides the context in which economic reforms

have to be implemented.

I would like to enter a caveat before I start.

I am aware that compression and brevity in

order to satisfy the time constraint may give

some of my arguments in this lecture the air of

ex cathedra pronouncements. Please note,

however, that the analytic and evidential basis

of my views on India’s economic problems,

including those considered in this lecture, is

fully laid out in my recent book India’s Long

Road—The Search for Prosperity.

2. India’s Economic Career, 1947–2017

India achieved independence from British rule

in 1947. Its political achievements since then

have been remarkable. National unity has been

* Emeritus Fellow, Merton College, Oxford University,

OX1 4JD, United Kingdom; email <vijay.joshi@merton.

ox.ac.uk>. This is a revised version of the Max Corden

Lecture delivered at the University of Melbourne on

29 March 2017.

The Australian Economic Review, vol. 51, no. 2, pp. 165–74

°

C2018 The University of Melbourne, Melbourne Institute of Applied Economic and Social Research

Published by John Wiley & Sons Australia, Ltd