India’s New Economy: Competition and Decentralization

  • Jati Sengupta

Abstract

Three principles are important for India’s new economy, the three C’s: the principle of Competence, the principle of Competition and the principle of Comparative advantage in trade. Each of these principles emphasizes the role of economic efficiency and productivity improvement in stimulating growth. The first principle deals with organizational efficiency: how to improve economic efficiency through restructuring of organizations and realigning managerial skills. The second emphasizes the efficiency gains from competition through market enhancing and cost effectiveness. Borrowing the best practice technology from abroad and adapting it to the domestic framework are possible strategies by which firms can gain market efficiency here. Finally, the comparative advantage principle emphasizes how to maximize economic gains from international trade by taking advantage of its comparative advantage in some goods and services. For example, India currently has a comparative advantage in IT goods and services such as body shopping and IT consulting, since it is relatively intensive in the supply of skilled IT manpower. However competition from other NICs in Asia is intensifying and there is a great need now for India to restructure its exportable services toward applied business applications and software package development.

Keywords

Europe Rubber Income Marketing Agglomeration 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Ahluwalia, I.J. (1995) New economic policies, enterprises and privatization in India. In: R. Cassen and V. Joshi (eds) India: the Future of Economic Reform. Delhi: Oxford University Press.Google Scholar
  2. Aswicahyono, H., Anas, T. and Ardiyanto, D. (2001) Internet providers: an industry study. In: P. Drysdale (ed.) The New Economy in East Asia and the Pacific. London: Routledge Curzon.Google Scholar
  3. Baba, Y. and Tschang, F.T. (2001) Corporate strategies in information technology firms. In: P. Drysdale (ed.) The New Economy in East Asia and the Pacific. London: Routledge Curzon.Google Scholar
  4. Bajpai, N. and Sachs, J.D. (1997) India’s economic reforms: some lessons from East Asia. Journal of International Trade and Economic Development6, 135–64.CrossRefGoogle Scholar
  5. Blanke, S., Pana, T. and Sala-i-Martin. (2004) Global Competitiveness Report. New York: World Economic Forum.Google Scholar
  6. Callen, T., Reyonds, P. and Towe, C. (eds) (2001) India at the Crossroads: Sustaining Growth and Reducing Poverty. Washington, DC: International Monetary Fund.Google Scholar
  7. Helpman, E. (2004) The Mystery of Economic Growth. Cambridge: Harvard University Press.Google Scholar
  8. Hu, S. and Chan, V. (2001) The Taiwanese experience: impact on production and trade. In: P. Drysdale, (ed.) The New Economy in East Asia and the Pacific. London: Routledge-Curzon.Google Scholar
  9. Huntington, S.P. (1996) The Clash of Civilizations and the Remaking of World Order. New York: Simon and Schuster.Google Scholar
  10. Krugman, P. (1991) Geography and Trade. Cambridge: MIT Press.Google Scholar
  11. Meliciani, V. (2001) Technology, Trade and Growth in OECD Countries. London: Routledge.CrossRefGoogle Scholar
  12. Nelson, R. (1995) National Systems of Innovation. Oxford: Oxford University Press.Google Scholar
  13. Porter, M. (2004) Building the microeconomic foundation of prosperity: findings from the business competitiveness index. In: X. Sala-i-Martin, (ed.) The Global Competitiveness Report. Oxford: Oxford University Press.Google Scholar
  14. Porter, M. and Stern, I. (2004) A report on global competitiveness. In: Porter, M. (ed.) Global Competitiveness Report. New York: World Economic Forum.Google Scholar
  15. Prahalad, C.K. and Hamel, G. (1990) The core competence of the corporation. Harvard Business Review, 66, 79–91.Google Scholar
  16. Sala-i-Martin, X. (2004) The Global Competitiveness Report 2003–2004. New York: Oxford University Press.Google Scholar
  17. Simon, H. (1997) An Empirically Based Microeconomics. New York: Cambridge University Press.Google Scholar
  18. Thangavelu, S.M. and Heng, T.M. (2001) Factors affecting growth in the region: R&D and productivity. In: P. Drysdale, (ed.) The New Economy in East Asia and the Pacific. London: Routledge Curzon.Google Scholar
  19. Welfens, W. and Warner, A. (1999) Globalization, Economic Growth and Innovation Dynamics. Berlin: Springer.CrossRefGoogle Scholar
  20. World Bank (1992) World Development Report. New York: Oxford University Press.Google Scholar
  21. World Bank (1996) The Chinese Economy. Washington, DC: World Bank.Google Scholar
  22. World Bank (2003) World Development Report. New York: Oxford University Press.Google Scholar

Copyright information

© Jati K. Sengupta 2005

Authors and Affiliations

  • Jati Sengupta
    • 1
  1. 1.University of CaliforniaSanta BarbaraUSA

Personalised recommendations