Relevance : GS Paper III
Introduction
The Economic Survey either glosses over or ignores many acute challenges faced by the Indian economy.
Insights from psychology
- The Survey is too late to incorporate insights from psychology into economics.
- Many other countries like the U.K., Australia and Singapore have for long being applying such points to policy design.
Private investment
- The Survey rightly underlines the need to revive private investment.
- However, it invokes the age-old comparison between India and East Asian countries.
India’s case vs East Asian model
- East Asian model was largely a story driven by the newly industrialised economies (NIEs). While these economies were successful in encouraging savings, the cost of capital was rather high, not unlike the problem in India today.
- Investment in East Asian countries was due to carefully calibrated reforms. In contrast, due to political compulsions, India’s reforms since 1991 have been rather haphazard.
