-By ArdorComm News Network
January 21, 2025
Economic reform in India remains a contentious issue, with all major political parties, from Left to Right, aligning on the need for substantial economic changes. However, critics argue that the impressive GDP growth since the 1991 reforms has failed to uplift incomes at the bottom, leading to growing public unrest among farmers, workers, and unemployed youth across diverse demographics.
While the capitalist Right advocates completing the liberalisation agenda, granting more freedom to capital markets, the socialist Left calls for better governance of these sectors to ensure fair wages and prices. Both sides, however, rely on politically necessary but unsustainable measures like direct money transfers and subsidies to address market failures.
Experts suggest that before accelerating reforms, India must objectively evaluate the outcomes of its 1991 economic liberalisation. Comparing India’s performance to China and Vietnam reveals stark disparities. Both nations, starting from similar economic conditions in the 1980s, have achieved significantly higher income growth among their poorest citizens. This success is attributed to their retention of socialist principles, blending state planning with market reforms, and prioritising public welfare.
In contrast, India’s adherence to free-market ideologies, influenced by Western economic theories, has left its lower half economically stagnant. Critics warn that prioritising GDP growth and corporate interests over fundamental metrics like healthcare, education, and income equality has corrupted governance and political integrity.
The debate highlights the need for Indian economic reformers to draw lessons from socialist economies like China and Vietnam, rather than solely from capitalist models. Sustainable reform, they argue, lies in policies that enhance citizen welfare over mere economic indicators, ensuring long-term stability and equitable growth.
As India prepares for its next wave of reforms, this introspection could redefine its path toward inclusive prosperity.