Indian Economic Reform: Much More Than You Wanted to Know

Link: https://slatestarcodex.com/2019/10/23/indian-economic-reform-much-more-than-you-wanted-to-know/   From a recent Charter Cities Institute report: From India’s independence from the British Raj in 1947 to the early 1990s, the country’s economic policy was largely socialist. In the 1980s some early steps were taken to open the Indian economy to increased trade, reduce controls over industry, and set a more realistic exchange rate. In 1991, more widespread economic reforms were introduced. These reforms included the end of government monopolies over certain sectors of the economy, reductions in barriers to entry for new firms, increased foreign investment was allowed, and tariffs and other barriers to trade were reduced or eliminated. After liberalization, exports increased substantially, and various service sector industries saw significant growth. India’s growth has not just been good for the more educated segment of the population. Datt, Ravallion, and Murgai (2016) argue that India has made substantial progress in reducing the incidence of absolute poverty, and that this trend exists in both urban and rural areas. Historically higher rates of rural poverty have been converging with urban rates of poverty, and the overall poverty rate has been declining at an accelerating rate in the post-1991 reform era. In the 1970s over 60 percent of Indians were living in extreme poverty. As of 2011, only 20 percent of the population lived in extreme poverty. Between 2005 and 2016, an estimated 271 million Indians rose out of multidimensional poverty, which accounts for various health, education, and living standard indicators rather than just income (UNDP and OPHI 2018). Infant mortality has fallen from 161.4 deaths per 1,000 births in 1960 to just 32 deaths per 1,000 births in 2017, and India should soon converge with the world average if the current trend continues. Life expectancy has also improved dramatically, rising from 41 years in 1960 to nearly 69 years today.