Political Science · Political Processes in India
UGC NET 2023 Political Science
Which of the two factors enhanced the growth rate of Indian economy in the 1980s as per Arvind Panagariya?
- 1. Attitudinal change amongst the policy makers
- 2. Export incentives for private companies
- 3. Political leadership was skeptical about import substitution industrialization
- 4. A more realistic exchange rate policy
A2 & 4 only ✓ Correct
B2 & 3 only
C3 & 4 only
D1 & 2 only
Correct answer: (A) 2 & 4 only — As per Arvind Panagariya, the two factors that lifted growth in the 1980s were incentives for private companies and a more realistic exchange rate policy, that is statements 2 and…
Explanation
★As per Arvind Panagariya, the two factors that lifted growth in the 1980s were incentives for private companies and a more realistic exchange rate policy, that is statements 2 and 4.
★Panagariya set out this argument in "India: The Emerging Giant" (2008), reading the 1980s as a phase of limited, pro-business reform.
★Incentives and concessions to private firms eased earlier controls and improved business confidence and investment.
★A more competitive, realistic exchange rate helped exports and corrected the overvaluation that had hampered trade.
★He saw the 1980s pickup as fragile and partly debt-driven, which the deeper 1991 reforms later put on a firmer footing.
★For NET, distinguish the limited pro-business reforms of the 1980s from the structural liberalization of 1991.
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