Whatever Happened To India?

September 15, 2012 in Daily Bulletin

India’s growth rate has dropped from 8.1% a year between 2004 and 2011 to around 5.5% so far this year. What happened? Peter Passell answered:

  • India had a short burst of reforms during crisis in the 90s, but since then interest groups in the democracy have blocked the progress of reforms.
  • India’s labour laws make it almost impossible to fire a worker once they are hired. Businesses are sending operations to countries where they don’t have to deal with this problem.
  • India has four times the population of the United States but only one third the land mass. There isn’t enough space to build things like factories.
  • India’s infrastructure is under developed. Roads are congested and power cuts are frequent.

Passell explores many more issues including how growth affected income inequality and what the country’s future holds for it. Find the article over here.

Source: Foreign Policy