What is wrong with the Indian economy?
Economist, Arvind Subramanian, offers some excellent insights
regarding the challenges afflicting the Indian economy in this op-ed:
In particular, Subramanian suggests:
“In the last few
years, the Indian economy has become increasingly afflicted by the curse of
rents. There have been terrestrial rents (from the allocation of land),
subterranean rents (from the allocation of rights to coal mining and oil and
gas exploration), and ethereal rents (from the allocation of spectrum). The
curse has not just been the unfair sharing of the rents between the government
and private sector at the expense of the consumer. It has really been the
resulting efficiency cost, whereby corruption has impaired the supply capacity
of the economy. Rent-seeking in land has affected the provision of
infrastructure. Rent-seeking in coal has affected power generation capacity.
Rent-seeking in spectrum nearly paralyzed the process of government itself. The
private sector is far from blameless for the surge in rent-seeking, but this
government is its root cause because it decides and controls the allocation of
scarce resources.”