Pathways through financial crisis: India

Global Governance

Volumn 12, Issue 4, 2006, Pages 413-429

  Ghosh, Arunabha ^a  

^a UNITED NATIONS DEVELOPMENT PROGRAMME   (United States)

Author keywords

Economic reform; Financial crisis; IMF; India; Interest groups

Indexed keywords

EID: 33845764262     PISSN: 10752846     EISSN: None     Source Type: Journal    
DOI: 10.1163/19426720-01204006     Document Type: Review

References (73)

1. With the tax base not expanding, indirect taxes accounted for 85 percent of total revenue.
2. Shankar Acharya, "Macroeconomic Management in the Nineties," Economic and Political Weekly 37, no. 16 (2002): 1515-1538.
3. Chakravarthy Rangarajan, "Recent Exchange Rate Adjustments: Causes and Consequences," Reserve Bank of India Bulletin 45, no. 9 (1991): 906.
4. Acharya, "Macroeconomic Management," p. 1520.
5. C. Rangarajan, "Recent Monetary Policy Measures and the Balance of Payments," Reserve Bank of India Bulletin 45, no. 7 (1991): 675.
6. Vijay Joshi and Ian Little, India: Macroeconomics and Political Economy, 1964-1991 (Washington, DC: World Bank, 1994), p. 162.
7. Bimal Jalan, "Balance of Payments: 1956-1991," in B. Jalan, ed., The Indian Economy: Problems and Prospects (New Delhi: Penguin, 1993), p. 168.
8. Acharya, "Macroeconomic Management," p. 1520.
9. Dani Rodrik and Arvind Subramanian, "From 'Hindu Growth' to Productivity Surge: The Mystery of the Indian Growth Transition," National Bureau of Economic Research (NBER) Working Paper 10376 (Washington, DC: NBER, 2004), available at www.nber.org/papers/w10376, p. 2 (accessed April 2004).
10. V. Cerra and S. C. Saxena, "What Caused the 1991 Currency Crisis in India?" IMF Staff Papers 49, no. 3 (2002): 403.
11. B. R. Nayar, "Political Structure and India's Economic Reforms of the 1990s," Pacific Affairs 71, no. 3 (1998): 343.
12. Cerra and Saxena, "1991 Currency Crisis," p. 403.
13. M. S. Ahluwalia, "India's Vulnerability to External Crises: An Assessment," in M. S. Ahluwalia, Y. V. Reddy, and S. S. Tarapore, eds., Macroeconomics and Monetary Policy: Issues for a Reforming Economy (New Delhi: Oxford University Press, 2002), pp. 199-200.
14. C. Towe, "India and the Asia Crisis," in T. Callen, P. Reynolds, and C. Towe, eds., India at the Crossroads: Sustaining Growth and Reducing Poverty (Washington, DC: International Monetary Fund, 2001);
15. S. Acharya, "Managing India's External Economic Challenges in the 1990s," in Ahluwalia et al., Macroeconomics and Monetary Policy.
16. Towe, "India and the Asia Crisis," p. 13.
17. Atul Kohli, Democracy and Discontent: India's Growing Crisis of Governability (Cambridge: Cambridge University Press, 1990), pp. 328-335.
18. Germany ($60 million) and Japan ($300 million) gave emergency assistance. See A. Bhaduri and D. Nayyar, The Intelligent Person's Guide to Liberalization (New Delhi: Penguin, 1996), p. 29.
19. Interview with Manmohan Singh, New Delhi, 27 June 2003.
20. Interview with Manmohan Singh, Indian Express, 17 February 2003. The president did not have a veto, but his advice carried the influence of his office.
21. Reserve Bank of India, Annual Report 1990-91 (Mumbai), p. 126.
22. Stuart Corbridge and John Harriss, Reinventing India: Liberalization, Hindu Nationalism and Popular Democracy (Cambridge, UK: Polity Press, 2000), p. 162.
23. In 1990, Virmani had published a paper advocating a liberalized trade regime; see A. Virmani, "Demand and Supply Factors in India's Trade," Economic and Political Weekly 26, no. 6 (1991).
24. Ahluwalia had written an influential paper recommending structural reforms in the economy.
25. Vanita Shastri, "The Politics of Economic Liberalization in India," Contemporary South Asia 6, no. 1 (1997): 36-42.
26. Rahul Mukherji, "India's Aborted Liberalization-1966," Pacific Affairs 73, no. 3 (2000): 375-392.
27. P. K. Chaudhry, V. L. Kelkar, and V. Yadav, "The Evolution of 'Home-grown Conditionality' in India-IMF Relations," Journal of Development Studies 40, no. 6 (2004): 59-81.
28. Cited in Nayar, "Political Structure," p. 340.
29. Budget speech to the Lok Sabha (lower house), 4 March 1991.
30. Manmohan Singh, budget speech to the Lok Sabha, 24 July 1991.
31. Reserve Bank of India, Annual Report 1990-91, p. 136.
32. I thank Shankar Acharya for this insight.
33. World Bank, "Country Strategy for India" (Washington, DC: World Bank, September 2004), pp. 26-27, available at http://siteresources.worldbank. org/INTINDIA/Resources/CountryStrategyforIndia_fullversion.pdf (accessed May 2006).
34. Manmohan Singh, budget speech to the Lok Sabha, 29 February 1992.
35. A. Varshney. "Mass Politics or Elite Politics? India's Economic Reforms in Comparative Perspective," in J. D. Sachs, A. Varshney, and N. Bajpai, eds., India in the Era of Economic Reforms (New Delhi: Oxford University Press, 1999), p. 247 (emphasis in original).
36. K. C. Dash, "India's International Monetary Fund Loans: Finessing Win-Set Negotiations Within Domestic and International Politics," Asian Suvey 39, no. 6 (1999): 903.
37. Phone interview with Montek Ahluwalia, 27 April 2004.
38. Calculated from Government of India, "Government Subsidies in India," Ministry of Finance Discussion Paper, New Delhi, 1997, annexure 4.
39. Interview with Manmohan Singh, in V. N. Balasubramanyam, Conversations with Indian Economists (New Delhi: Macmillan, 2001). p. 94. Also see C. Rangarajan's interview in the same book.
40. Ahluwalia, "India's Vulnerability."
41. Government of India, "Public Sector Commercial Banks and Financial Sector Reform: Rebuilding for a Better Future," Ministry of Finance Discussion Paper, New Delhi. 1993, p. 13.
42. Until then, the controller of capital issues had been part of the finance ministry.
43. A. Shah and S. Thomas, "The Evolution of the Securities Markets in India in the 1990s," Indian Council for Research on International Economic Relations Working Paper No. 121.2002, available at www.icrier.res.in/ publications.html (accessed May 2004).
44. Phone interview with Arvind Virmani, 8 May 2004.
45. Y. V. Reddy, "Exchange Rate Management: Dilemmas," Reserve Bank of India Bulletin 51, no. 9 (1997): 701-708.
46. Ahluwalia, "India's Vulnerability," p. 210.
47. The Foreign Investment Promotion Board, chaired by the principal secretary to the prime minister, was created to expedite FDI proposals.
48. For a discussion, see Y. V. Reddy, "Managing Capital Flows," lecture at the Asia-Pacific Research Center, Stanford University, 23 November 1998,
49. reprinted in Y. V. Reddy, Monetary and Financial Sector Reforms in India: A Central Banker's Perspective (New Delhi: UBSPD, 2000).
50. D. Nayyar, "Capital Controls and the World Financial Authority: What Can We Learn from the Indian Experience?" in J. Eatwell and L. Taylor, eds., International Capital Markets: Systems in Transition (New York: Oxford University Press, 2002), p. 101.
51. For details on the case, see Acharya, "Macroeconomic Management," pp. 221-222.
52. Reserve Bank of India, Annual Report 1996-97 (Mumbai), p. 122.
53. This explains why V. Joshi, "India and the Impossible Trinity," World Economy 26. no. 4 (2003): 555-583. labels India as having an "intermediate regime with capital controls," as opposed to what the government called "market-determined" rate or the IMF characterized as "independently floating" rate.
54. They shared information on other countries' strategies. Phone interview with Arvind Virmani, 8 May 2004.
55. International Monetary Fund, "Press Information Notice: IMF Concludes Article IV Consultation with India" (Washington, DC: IMF, 1997), available at www.imf.org/external/np/sec/pn/1997/pn9711.htm (accessed March 2004).
56. Reserve Bank of India, Annual Report 1996-97, p. 19.
57. Interview with Manmohan Singh, New Delhi, 27 June 2003.
58. Akira Ariyoshi et al., "Capital Controls: Country Experiences with Their Use and Liberalization," IMF Occasional Paper No. 190 (Washington, DC: International Monetary Fund, 2000), p. 84, available at www.imf.org/ external/pubs/ft/op/op190/index.htm (accessed March 2004).
59. "Indian Test Match," The Economist, 14 August 1997.
60. Acharya, "Macroeconomic Management," p. 238.
61. Nayyar, "Capital Controls," p. 117.
62. Discussion based on Ahluwalia, "India's Vulnerability,"
63. and Nayyar, "Capital Controls."
64. N. Jadhav, "Capital Account Liberalisation: The Indian Experience," paper presented at the conference "A Tale of Two Giants: India's and China's Experience with Reform and Growth," International Monetary Fund and National Council of Applied Economic Research, New Delhi, 16 November 2003, p. 29, available at www.imf.org/external/np/apd/seminars/2003/ newdelhi/jadhav.pdf (accessed March 2004);
65. R. Kohli, "Capital Flows and Their Macroeconomic Effects in India," IMF Working Paper 01/192 (Washington, DC: IMF, 2001), p. 17, available at www.imf.org/external/pubs/cat/longres.cfm?sk=15471.0 (accessed March 2004).
66. D. Nayyar, Economic Liberalization in India: Analytics, Experience, and Lessons (Calcutta: Centre for Studies in Social Sciences, 1996), p. 33.
67. N. Bajpai, J. D. Sachs, and N. Volavka, "India's Challenge to Meet the Millennium Development Goals," Centre on Globalisation and Sustainable Development Working Paper No. 24, April 2005, available at www.earthinstitute. columbia.edu/cgsd/documents/bajpai_indiamdgchallenge.pdf (accessed May 2006).
68. See also A. Deaton and J. Dreze, "Poverty and Inequality in India: A Re-examination," Economic and Political Weekly, 1 September 2002, pp. 3729-3747.
69. On unequal growth across states, see G. Datt and M. Ravallion, "Is India's Economic Growth Leaving the Poor Behind?" Journal of Economic Perspectives 16, no. 3 (2002): 89-108.
70. A. Shariff, P. K. Ghosh, and S. K. Mondai, "Indian Public Expenditures on Social Sector and Poverty Alleviation Programmes During the 1990s," Overseas Development Institute (ODI) Working Paper No. 169 (London: ODI, 2002), available at www.odi.org.uk/Publications/working_papers/wp169.pdf (accessed June 2006).
71. S. M. Dev and J. Mooij, "Social Sector Expenditure in the 1990s: Analysis of Central and State Budgets," Economic and Political Weekly, 2 March 2002, pp. 853-866.
72. UNDP, Human Development Report 2005, International Cooperation at a Crossroads: Aid, Trade and Security in an Unequal World (New York: Oxford University Press, 2005), pp. 28-29.
73. BBC, "India Launches Rural Health Plan," 12 April 2005, available at http://news.bbc.co.uk/1/hi/world/south_asia/4436603.stm (accessed May 2005).