{"id":228372,"date":"2023-02-23T20:44:41","date_gmt":"2023-02-23T15:14:41","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=228372"},"modified":"2023-02-23T20:44:41","modified_gmt":"2023-02-23T15:14:41","slug":"india-at-a-crossroads-reduce-the-risks-of-economic-concentration","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/india-at-a-crossroads-reduce-the-risks-of-economic-concentration\/","title":{"rendered":"India at a crossroads: Reduce the risks of economic concentration"},"content":{"rendered":"\n

Source<\/strong>: The post is based on the article\u00a0\u201cIndia at a crossroads: Reduce the risks of economic concentration<\/strong>\u201d published in Live Mint<\/strong> on\u00a023rd<\/sup> February 2023<\/strong>.<\/p>\n

Syllabus: GS 3 \u2013 Indian Economy<\/strong><\/p>\n

Relevance: <\/strong>protectionists policies adopted by India<\/p>\n

News<\/strong>: Many policies have been implemented by the government to make India one of the most important countries in the world. However, those policies also have concerns.<\/p>\n

How have policies helped India?<\/strong><\/h2>\n

The government has implemented various policies that have modernized India and supported its growth.<\/p>\n

A massive investment has been made in the single market and in infrastructure including digital infrastructure. These investments with industrial policies and a growing digital based welfare system have led to robust economic performance.<\/strong><\/p>\n

Furthermore,\u00a0India\u2019s military and geopolitical importance will only grow, and its cultural diversity will generate soft power to rival the US and the UK.<\/p>\n

However, there are also concerns with these policies.<\/p>\n

What are the concerns with these developmental policies?<\/strong><\/h2>\n

These policies have made India an economy where large private corporations\/conglomerates control a significant part of the economy.<\/strong><\/p>\n

These conglomerates have helped the economy to grow despite lower investment rates. But, the problem with these conglomerates is that they have been able to influence policymaking to benefit themselves.<\/p>\n

This has in turn led to two problems – a)<\/strong> it has become a hurdle to the growth of early-stage startups and domestic entrants in key industries, b)<\/strong> it is changing the government\u2019s \u2018Make in India\u2019 programme into a counterproductive, protectionist scheme.<\/p>\n

What issues are associated with the development of conglomerates?<\/strong><\/h2>\n

If any loopholes found in these big industries (e.g., Adani Group), it hurts India\u2019s image globally. It has implications for India\u2019s institutional robustness and global investors\u2019 perceptions of India.<\/p>\n

The Asian financial crisis of the 1990s<\/strong> demonstrated that the partial capture of economic policy by capitalist conglomerates will hurt productivity growth by hampering competition, inhibiting creative destruction and increasing inequality.<\/p>\n

Hence, India\u2019s long-term success ultimately depends on whether it can foster and sustain a growth model that is competitive, dynamic, sustainable, inclusive and fair.<\/p>\n

What are the problems with the Make in India scheme?<\/strong><\/h2>\n

Make in India was intended to strengthen the Indian economy by increasing the domestic production of goods for exports.<\/p>\n

However, India is promoting domestic products<\/strong> in Indian markets through Make in India and adopting protectionist import-substitution policies<\/strong>.<\/p>\n

This gives advantages to domestic industries and conglomerates from global competition.<\/p>\n

Moreover, India\u2019s tariff policies<\/strong> are preventing it from becoming more competitive in goods export and it has also resisted joining regional trade agreements.<\/p>\n

This ultimately affects the objective of Make in India which was intended to increase trade exports.<\/p>\n

Another problem with Make in India is<\/strong> that it has evolved to support production in labour-intensive industries such as cars, tractors, locomotives, etc.<\/p>\n

However, India should be focusing on industries where it has a comparative advantage, such as tech and IT, artificial intelligence, business services and fintech.<\/p>\n

Hence, for reaping the benefits of Make in India, policymakers should focus on these dynamic sectors by establishing special economic zones. Else, Make in India will continue to produce suboptimal results.<\/p>\n","protected":false},"excerpt":{"rendered":"

Source: The post is based on the article\u00a0\u201cIndia at a crossroads: Reduce the risks of economic concentration\u201d published in Live Mint on\u00a023rd February 2023. Syllabus: GS 3 \u2013 Indian Economy Relevance: protectionists policies adopted by India News: Many policies have been implemented by the government to make India one of the most important countries in… Continue reading India at a crossroads: Reduce the risks of economic concentration<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[216,10501],"class_list":["post-228372","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-3","tag-live-mint","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/228372","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=228372"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/228372\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=228372"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=228372"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=228372"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}