Skip to main content Accessibility help
×
Hostname: page-component-76fb5796d-vfjqv Total loading time: 0 Render date: 2024-04-26T22:03:53.896Z Has data issue: false hasContentIssue false

7 - Indian Federalism, Economic Reform, and Globalization

Published online by Cambridge University Press:  25 July 2009

Nirvikar Singh
Affiliation:
Professor of Economics and Director of Santa Cruz Center for International Economics, University of California, Santa Cruz
T. N. Srinivasan
Affiliation:
Samuel C. Park Jr., Professor of Economics and Chair of the South Asian Studies Council, Yale University; Senior Research Fellow Stanford Center for International Development
Jessica Wallack
Affiliation:
University of California, San Diego
T. N. Srinivasan
Affiliation:
Yale University, Connecticut
Get access

Summary

India is a Union of States based on the framework of cooperative federalism. Within the cooperative framework, there is also a requirement to develop competitive strengths for the States so that they can excel at the national level and the global level. Competitiveness helps in ensuring economic and managerial efficiency and to be creative to meet new challenges. These are essential to survive and prosper in a fast changing world of today. In addition, in order to strengthen democratic processes and institution, we should all truly strive for substantive decentralization.

From the speech by Dr. A. P. J. Abdul Kalam on his assumption of office as President of India New Delhi, 25 July 2002

INTRODUCTION

In this chapter we examine the interaction between globalization and India's federal system, in the context of the country's past decade of economic reform. In doing so, we recognize that the national government has subnational governments below it and that all these layers of government simultaneously interact with foreign governments and corporations in a global economy. These multiple interactions have become more important as reform in India has opened up the economy to foreign trade and investment, They have also reduced certain constraints on subnational governments. Globalization provides challenges as well as opportunities to federal systems such as India's. This chapter seeks to elucidate these and to draw implications for policy and institutional reform.

In economic terms, globalization can be taken as the increased international mobility of goods, capital, labor, and knowledge.

Type
Chapter
Information
Federalism and Economic Reform
International Perspectives
, pp. 301 - 363
Publisher: Cambridge University Press
Print publication year: 2006

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Acharya, S. (2002). India's Macroeconomic Management in the Nineties. New Delhi: Indian Council of Research in International Economic Relations.Google Scholar
Ahluwalia, M. S. (2002a). “State Level Performance under Economic Reforms in India,” in Krueger, A., ed., Economic Policy Reforms and the Indian Economy. pp. 91–128. Chicago: University of Chicago Press.CrossRefGoogle Scholar
Ahluwalia, M. S. (2002b). “Economic Reforms in India Since 1991: Has Gradualism Worked?,” Journal of Economic Perspectives, 16(3): 67–88.CrossRefGoogle Scholar
Aiyar, S. (2001). “Growth Theory and Convergence across Indian States: A Panel Study,” Chapter 8 in Callen, T., Reynolds, P., and Towe, C., eds., India at the Crossroads: Sustaining Growth and Reducing Poverty pp. 143–169. Fund Washington, D.C.: International Monetary.Google Scholar
Bajpai, N., and Sachs, J. (1999). “The Progress of Policy Reform and Variations in Performance at the Sub-National Level in India,” Development Discussion Paper No. 730, Harvard Institute for International Development, November.Google Scholar
Baron, D., and Ferejohn, J. (1989). “Bargaining in Legislatures,” American Political Science Review 83: 1181–1206.CrossRefGoogle Scholar
Bhattacharya, S., and U. Patel (2002). “Financial Intermediation in India: A Case of Aggravated Moral Hazard,” paper presented at 3rd Annual Stanford Conference on Indian Economic Reform.
Breton, A. (1996). Competitive Governments: An Economic Theory of Politics and Public Finance. New York: Cambridge University Press.Google Scholar
Cashin, P., and Sahay, R. (1996). “Internal Migration, Center-State Grants, and Economic Growth in the States of India,” International Monetary Fund Staff Papers 43 (1): 123–171.CrossRefGoogle Scholar
Das-Gupta, A., and Mookherjee, D. (1998). Incentives and Institutional Reforms in Tax Enforcement: An Analysis of Developing Country Experience. Delhi: Oxford University Press.Google Scholar
Dollar, D., G. Iarossi, and T. Mengistae (2002). “Investment Climate and Economic Performance: Some Firm Level Evidence from India”, paper presented at 3rd Annual Stanford Conference on Indian Economic Reform.
Dossani, R. (2002a). Telecommunications Reform in India, Asia/Pacific Research Center, Stanford University, June.Google Scholar
Dossani, R. (2002b). India's Power Sector Reforms, Asia/Pacific Research Center, Stanford University, June.Google Scholar
Dossani, R., and Crow, R. T. (2001). “Restructuring the Electric Power Sector in India: Alternative Institutional Structures and Mechanisms,” Working Paper, Asia/Pacific Research Center, Stanford University.Google Scholar
Dreze, J., and Sen, A. (1995). India: Economic Development and Social Opportunity. Delhi: Oxford University Press.Google Scholar
Forbes, N. (2002). “Doing Business in India: What Has Liberalization Changed?,” in Krueger, A., ed., Economic Policy Reforms and the Indian Economy. Chicago: University of Chicago Press.CrossRefGoogle Scholar
Frankel, F. (2002). Discussant's Comments, Workshop on Federalism in a Globalized Environment, CREDPR, Stanford University, June 6–7.Google Scholar
Government of India (2004). Report of the Task Force on Implementation of the Fiscal Responsibility and Budget Management Act, 2003, Ministry of Finance, July.
Gulati, A., and Bathla, S. (2001). “Capital Formation in Indian Agriculture: Revisiting the Debate,” Economic and Political Weekly 36: 20.Google Scholar
Hirschman, A. O. (1970). Exit, Voice, and Loyalty; Responses to Decline in Firms, Organizations, and States. Cambridge, MA: Harvard University Press.Google Scholar
Inman, R., and D. Rubinfeld (1997). “The Political Economy of Federalism,” in Mueller, D., ed., Perspectives on Public Choice: A Handbook. Cambridge, UK: Cambridge University Press.Google Scholar
Jha, P. S. (2002). “Counsel of Despair,” The Hindu, September 12, 2002, http://www.hinduonnet.com/thehindu/2002/09/12/stories/2002091202511800.htm.
Kapur, D. (2001). “India's Institutions and Economic Performance,” paper presented at conference on Public Institutions in India: Performance and Design, Harvard University, February.
Kapur, D., and R. Ramamurthi (2002). “Privatization in India: The Imperatives and Consequences of Gradualism,” paper presented at 3rd Annual Stanford Conference on Indian Economic Reform.
Lahiri, A. K. (1999). “Practising Sub-National Public Finance in India,” paper presented at the First Meeting of the Global Network Conference, Session on Decentralization, Governance and Public Goods in Large Economies, Bonn, Germany, December. New Delhi: NIPFP.
Majeed, A. (2002). Untitled paper presented at Roundtable on Mechanisms of Intergovernmental Relations in India, Institute of Social Sciences, New Delhi, April 22.
Mauor, J. (1995). “Political Sustainability of Economic Reform,” in Cassen, R., and Joshi, U., eds. India: The Future of Economic Reforms pp. 339–363. New Delhi: Oxford University Press.CrossRef
Mathur, O. P. (1999). “Decentralization in India: A Report Card,” Working Paper, National Institute of Public Finance and Policy, New Delhi, March.Google Scholar
McKinsey Global Institute (2001). India: The Growth Imperative, September.
Mohan, R. (2001). “Achieving Higher Economic Growth: The Fiscal Deterrent,” paper presented at 2nd Annual Stanford Conference on Indian Economic Reform, June.
Mohan, R. (2002a). “Small Scale Industry Reservations,” in Krueger, A., ed., Economic Policy Reforms and the Indian Economy. Chicago: University of Chicago Press.CrossRefGoogle Scholar
Mohan, R. (2002b). Discussant's Comments, Workshop on Federalism in a Globalized Environment, CREDPR, Stanford University, June 6–7.Google Scholar
Mukherjee, A. (2002). “Foreign Firms Pulling Out of Power Projects,” The Hindu, July 8, www.hinduonnet.com/stories/2002070802271300.htm.
Nagaraj, R., A. Varoudakis, and M.-A. Véganzonès (1998). “Long-Run Growth Trends and Convergence across Indian States,” OECD Technical Paper No. 131.
NASSCOM (National Association of Software and Service Companies) (2002a). Software Export, www.nasscom.org/it_industry/sw_export.asp.
NASSCOM (National Association of Software and Service Companies) (2002b). FY02: Software and Service Industry Performance, July 18, www.nasscom.org/download/FYo2-results.pdf.
Planning Commission (2002). National Human Development Report. New Delhi: Government of India.
Rajaraman, I. (2001). “Growth-Accelerating Fiscal Devolution to the Third Tier”, paper presented at NIPFP-DFID-World Bank Conference on India: Fiscal Policies to Accelerate Economic Growth, New Delhi, May.
Rao, M. G. (2000a). “Tax Reform in India: Achievements and Challenges,” Asia-Pacific Development Journal 7(2): 59–74.Google Scholar
Rao, M. G. (2000b). “Fiscal Decentralization in Indian Federalism,” processed, Bangalore: Institute for Social and Economic Change.Google Scholar
Rao, M. G. (2002). “State Level Fiscal Reforms in India,” paper presented at Cornell University, Conference on Indian Economic Reform, April 19–20.
Rao, M. G., and Singh, N. (1998). “Fiscal Overlapping, Concurrency and Competition in Indian Federalism,” Working Paper 30b, Center for Research on Economic Development and Policy Reform, Stanford University.Google Scholar
Rao, M. G., and N. Singh (2003). “The Political Economy of Center-State Fiscal Transfers in India,” in McLaren, J., ed., Institutional Elements of Tax Design and Reform pp. 220–247. Washington, D.C.: World Bank.CrossRef
Rao, M. G., and Singh, N. (2001). “Federalism in India: Political Economy and Reform,” paper presented at the conference, “India: Ten Years of Economic Reform,” at the William Davidson Institute, University of Michigan, September 2001.Google Scholar
Rao, M. G., and N. Singh (2002). “Fiscal Transfers in a Developing Country: The Case of India,” paper presented at University of Birmingham conference on comparative federalism.
Rao, M. G., and Singh, N. (2005). The Political Economy of Indian Federalism. New Delhi: Oxford University Press.Google Scholar
Rao, M. G., Shand, R., and Kalirajan, K. P. (1999). “Convergence of Incomes across Indian States: A Divergent View,” Economic and Political Weekly, March 27–April 2.Google Scholar
Reddy, Y. V. (1979). Multilevel Planning in India. New Delhi: Vikas.Google Scholar
Reserve Bank of India (2001). Annual Report 2000–2001. Bombay: Reserve Bank.
Richards, A., and Singh, N. (2002). “Inter State Water Disputes in India: Institutions and Policies,” in International Journal of Water Resources Development 18(4): 611–625.CrossRefGoogle Scholar
Riker, W. (1975). “Federalism,” in Greenstein, F. I. and Polsby, N. W., eds., Handbook of Political Science, Vol. 5: 72–93. Reading, MA: Addison-Wesley.Google Scholar
Roy, A. (2002). “Facilitating FDI,” The Hindu, September 30, 2002, http://www.hinduonnet.com/thehindu/2002/09/30/stories/2002093000020200.htm.
Sáez, L. (2002). Federalism without a Centre: The Impact of Political and Economic Reform on India's Federal System. New Delhi: Sage Publications.Google Scholar
Singh, N. (2002). “Information Technology and India's Economic Development,” in Basu, K., ed., India's Emerging Economy: Performance and Prospects in the 1990s and Beyond 223–262. Cambridge, MA: MIT Press.Google Scholar
Singh, N. (2004). “Some Economic Consequences of India's Institutions of Governance: A Conceptual Framework,” India Review 3(2): 114–146.CrossRefGoogle Scholar
Singh, N., and T. N. Srinivasan (2004). “Fiscal Policy in India: Lessons and Priorities,” paper presented at NIPFP-IMF Conference on Fiscal Policy in India, New Delhi, January.
Singh, N., and G. Vasishtha (2004). “Some Patterns in Center-State Fiscal Transfers in India: An Illustrative Analysis,” UCSC working paper.
Singh, N. K., and A. Modi (2001). “Direct Tax Reform in India,” paper presented at 2nd Annual Stanford Conference on Indian Economic Reform, June.
Srinivasan, T. N. (2002). “India's Fiscal Situation: Is a Crisis Ahead?,” in Krueger, A., ed., Economic Policy Reforms and the Indian Economy. Chicago: University of Chicago Press.Google Scholar
Srinivasan, T. N., and Tendulkar, S. D. (2002). Reintegrating India with the World Economy. Washington, DC:Institute for International Economics.Google Scholar
Srivastava, R. (1998). “Migration and the Labour Market in India,” The Indian Journal of Labour Economics 41: 583–616.Google Scholar
Watts, R. (2001). “Introduction: Federalism in an Era of Globalisation,” International Social Science Journal 53: 9–12.CrossRefGoogle Scholar
Weingast, B. (1993). “Constitutions as Governance Structures,” Journal of Institutional and Theoretical Economics 149: 233–261.

Save book to Kindle

To save this book to your Kindle, first ensure coreplatform@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

  • Indian Federalism, Economic Reform, and Globalization
    • By Nirvikar Singh, Professor of Economics and Director of Santa Cruz Center for International Economics, University of California, Santa Cruz, T. N. Srinivasan, Samuel C. Park Jr., Professor of Economics and Chair of the South Asian Studies Council, Yale University; Senior Research Fellow Stanford Center for International Development
  • Edited by Jessica Wallack, University of California, San Diego, T. N. Srinivasan, Yale University, Connecticut
  • Book: Federalism and Economic Reform
  • Online publication: 25 July 2009
  • Chapter DOI: https://doi.org/10.1017/CBO9780511511004.007
Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

  • Indian Federalism, Economic Reform, and Globalization
    • By Nirvikar Singh, Professor of Economics and Director of Santa Cruz Center for International Economics, University of California, Santa Cruz, T. N. Srinivasan, Samuel C. Park Jr., Professor of Economics and Chair of the South Asian Studies Council, Yale University; Senior Research Fellow Stanford Center for International Development
  • Edited by Jessica Wallack, University of California, San Diego, T. N. Srinivasan, Yale University, Connecticut
  • Book: Federalism and Economic Reform
  • Online publication: 25 July 2009
  • Chapter DOI: https://doi.org/10.1017/CBO9780511511004.007
Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

  • Indian Federalism, Economic Reform, and Globalization
    • By Nirvikar Singh, Professor of Economics and Director of Santa Cruz Center for International Economics, University of California, Santa Cruz, T. N. Srinivasan, Samuel C. Park Jr., Professor of Economics and Chair of the South Asian Studies Council, Yale University; Senior Research Fellow Stanford Center for International Development
  • Edited by Jessica Wallack, University of California, San Diego, T. N. Srinivasan, Yale University, Connecticut
  • Book: Federalism and Economic Reform
  • Online publication: 25 July 2009
  • Chapter DOI: https://doi.org/10.1017/CBO9780511511004.007
Available formats
×