Montek Ahluwalia, the former Deputy Chair of India’s National Planning Commission (a cabinet position) and key partner with Prime Minister Manmohan Singh in driving India’s economic reforms in the 1990s, spoke to CDE’s executive director Ann Bernstein about democracy, business, markets, and development.
Ahluwalia detailed how the reform programme he helped to design caused a structural break in the growth rate, which rose from 3.5% before the 1990s to more than 7% on average for over 20 years.
In this conversation, Bernstein and Ahluwalia discussed the different types of reform paths a country can take, the importance of political leadership for driving reform, and the lessons from the Indian experience.
“We consistently took the view that at India’s level of per-capita income, redistribution independent of growth doesn’t make any sense at all. We had to have a policy that promotes growth.” – Montek Ahluwalia
Ahluwalia thought that India was slow in doing the easier, ‘stroke-of-the-pen’ reforms, and even slower in doing the difficult, second-generation reforms that require institution-building.