This book and its companion volume Money and Finance in the Indian Economy bring together essays written over the last fifteen years by eminent economist Mihir Rakshit. The essays cover practically all major macroeconomic developments in India in the process of transition from a plan to a market-oriented economy. These essays focus on the overall behaviour of the economy, that is, the genesis of and lessons from the 1990-91 payments crisis that led to the adoption of a comprehensive reforms programme; the different phases of post-reform macroeconomic development and the series of puzzles surfacing therein; the nature and sustainability of services-led growth; and the analytical-cum-policy issues relating to inflation arising from oil price or other shocks. The author provides a survey of the current state of mainstream macroeconomics and discusses its application to the Indian context. He emphasizes the significance of agriculture, infrastructural bottlenecks, absorption of labour in the unorganized sector, and large-scale financial dualism as particularly important in the Indian context. Using such a framework casts new light on the main drivers of the Indian macroeconomy, underlines its major sectoral interlinkages, and helps draw analytical and policy conclusions that are often sharply at variance with the conventional wisdom or widely held beliefs. An unusual blend of theory, policy and reality, this volume will interest students and researchers in development economics, economists, policymakers, and readers interested in the emerging problems of open development economies.
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