EconTalk Jagdish Bhagwati on India
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Aug 19, 2013 
Jagdish Bhagwati, a renowned Professor of Economics at Columbia University and expert on international trade, dives into the transformative economic journey of India. He discusses the pivotal reforms of 1991 that initiated impressive growth, reducing poverty and enhancing living standards. Highlighting the importance of prioritizing growth before social spending, Bhagwati introduces the 'pull-up strategy' for poverty alleviation. He also addresses the rise of private education and debates surrounding economic reforms, showcasing the challenges and opportunities in India's evolving landscape.
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India's Economic Shifts Post-Independence
- India had robust growth initially post-independence before slipping into heavy regulation due to balance of payment crises.
- The shift to socialism under Indira Gandhi heavily damaged the economy, reversed only with 1991 reforms.
Growth Pulling People Out of Poverty
- 1991 reforms sparked a dramatic increase in growth, pulling millions out of poverty through opportunity expansion.
- Growth acts as a pull-up strategy for the poor by increasing government revenue for social spending.
Key 1991 Reforms Unleashed Growth
- Reforms in 1991 fundamentally dismantled licensing and import restrictions, enabling competition and scale economies.
- Growth increase after 1991 was substantially larger than any prior decade's modest reform progress.