Articles by Pulapre Balakrishnan

The 1990s did not witness a significant step up in the rate of growth of the economy. This failure to show acceleration, especially in industry, is often treated as a failure of reforms to sufficiently energise the Indian economy. However, this does not warrant the conclusion that the reforms failed. There may have been less than imaginative macroeconomic policy support to growth. In particular, there was declining budgetary support to capital formation, especially in agriculture, and the bizarre case of a missing monetary policy. The growth experience of the 1990s shows that macroeconomic policy is indispensable even in peace-time so to speak, and not just during a crisis. Poor macro management might leave untravelled even the most sophisticated road maps for structural change usually termed 'economic reforms'.

In a study of the evolution of the Indian manufacturing sector over close to three decades we find the annual average rate of growth in the nineties to have risen almost across the board at the two-digit level of industry. Nevertheless, the acceleration is not particularly impressive for what is often hailed as the most significant policy-regime shift since 1950. There is a hefty rise in investment, however, though without a corresponding increase in its efficiency. And distribution has shifted sharply with labour's share declining. This paper attempts to link these developments in a coherent way.

Keynes with or without Capital Flows PULAPRE BALAKRISHNAN SKrishnakumar

As the world economy integrates Keynesian reach multiplies, for the stakes in compensating for aggregate demand swings are now commensurately higher and spread over a wider area of the globe.

Using panel data comprising firm-level information drawn from groups within manufacturing industry which have experienced the most significant tariff reduction, this study investigates the trend in productivity growth since 1988-89. The sample of 2,300 firms and 11,009 observations, spanning the period 1988-89 to 1997-98 is very likely the largest assembled for the purpose thus far. We find no evidence of acceleration in productivity growth since the onset of reforms in 1991-92. The result is evaluated in relation to the changes till date in the policy regime in the Indian economy.