My analysis on South Asia's Economic Policy Reforms focusing on India and Bangladesh's Case Study. I also tried to touch a little bit on the effects of these reforms on Development and Growth.

1. A Comparative Analysis of
Economic Policy Reforms in
India and Bangladesh
And Its Impact on Economic Growth and
Development
PREPARED BY: MANAS NAG
Nanyang Technological University,
Singapore. 1

2. Presentation Outline:
● Introduction
● Literature Review
● Overview of the Countries
● History of Reforms
● Analysis
● Growth and Development
● Policy Challenges
● Concluding Remarks and Q/A
2

3. Literature Review
● Ahluwalia, Montek S (2002)
> Focused on the Economic Reforms in India since the 1990s,
> Attempted to answer the slow-down of growth in India after the mid 1990s,
> Questioned the effectiveness of reforms and their implementation.
● Mohammed Nuruzzaman (2004)
> Analyse the Socio-Economic discrimination that Economic Reforms have
produced in Bangladesh.
>Industrial and Business Community as winners and rest of the society as losers.
3

4. Literature Review
● Fahmidul Qadir (2000)
> Pro-market Economic reforms were motivated by Regime-Survival.
> The Military-Bureaucratic elite drafted the Business and Industrial community
into Ruling Class who capitalized on reforms to expand their wealth.
● Mohammad Imran Hossain (2013)
> A positive relationship between long run economic growth and the proxies
picked to represent liberalization reforms in Bangladesh.
● Rahul Mukherji (2009)
> How reforms in India resulted in efficiency of some sectors while others like
agriculture and power lagged behind.
4

5. INDIA Vs BANGLADESH: An Overview of Indicators
Development
Indicators
India Bangladesh
GDP Annual Growth (%)
7.01% 7.113%
GDP Per Capita, 2017
$1852 $1524
Life Expectancy, 2015 66 Years 71 years
Reduction of Rate in Child
Dying before Five, 2015
58% 72%
Percentage of Women in
Labor Force, 2015
29% 36%
Maternal Mortality Ratio
(per 100,000), 2015
174 176
Data Source: World Bank, IMF, WSJ.
5

6. WHY?
Background of Economic Reforms in India and
Bangladesh.
6

7. INDIA
★ Rajiv Gandhi (1984-89)- the Legacy.
>Background Research on
Economic Liberalization at PMO.
>Corporatization of DOT (MTNL).
>Easing of MRTP act.
>Software as Export Oriented Sector.
★ IMF the last Resort (1991)
> Balance of Payment Crisis
> Fiscal Deficit
> Foreign Exchange Shortage (2 weeks)
7

8. ★ The State-Socialism (1972-1975)
> Massive mismanagement
> Famine of 1974
> Failure of State-owned enterprises
> Military Coup
★ Pro-Market Reforms (post-1975)
> Donor pressure and Aid Dependence
> Structural Adjustment reforms by World Bank and IMF
> Regime Survival
BANGLADESH
8

9. Post-1991 REFORMS in INDIA:
➔Fiscal Deficit Reduction
➔Industrial and Trade Policy
➔Agriculture Policy
➔Infrastructure Development
➔Financial Development
➔Gradual Privatization
➔Social Sector Development
9

10. Post-1975 REFORMS in BANGLADESH
➔New Industrial Policy of 1982 (Jute and Textile)
➔Trade Liberalization of Mid 1980s.
➔Agricultural Policy Reform (input market)
➔Fiscal Policy Reform (VAT ACT 1991)
➔Financial Sector Reform (Banking)
➔Monetary Management Reform
10

11. State control over
industries came
down to 3 from
18 during pre-
reform years.
India
Removal of
Quantitative
Restrictions And
Reservation
Policy (as many
as 800)- India
NOTABLE PROGRESS SO
FAR
Good
Macroeconomic
Management due to
Donor Influence (eg:
low inflation,
sustainable debts,
low deficits)
Bangladesh
11

12. IMPACT ON
GROWTH AND DEVELOPMENT
12

13. SURPRISES - PLEASANT,
UNPLEASANT
➔Faster Growth, Greater Efficiency.
➔Foreign Direct Investment
➔Growth within segments of Manufacturing
(Automobile)
➔R&D Hub of Information Technology Firms
➔Sustained Growth
➔Poverty Reduction
➔RMG Export Boom
➔Food Security 13

14. Source: The World Bank
FDI Net Inflow, 45B
USD (Current $)
14

15. SURPRISES - PLEASANT,
UNPLEASANT
➔Faster Growth, Greater Efficiency.
➔Foreign Direct Investment
➔Growth within segments of Manufacturing
(Automobile)
➔R&D Hub of Information Technology Firms
➔Sustained Growth
➔Poverty Reduction
➔RMG Export Boom
➔Food Security 15

16. THE UNPLEASANT
HIGH DEBT to
GDP RATIO
LOW-GROWTH
AGRICULTURE
INTER
STATE
INEQUALITY
LOW
MANUFACTURING
INDUSTRY
GROWTH
INCREASING
INCOME
INEQUALITY
POWER
SECTOR
GOVERNMENT
MONOPOLY
STRUCTURAL
IMPEDIMENT TO
INVESTMENT
FINANCIAL
SECTOR
REFORM
CROWDING
OUT
16

17. POLICY
CHALLENGES FOR
FUTURE
17

18. JOBLESS GROWTH
Study Source: SANEM 18

19. AGRICULTURE VALUE ADDED (% of GDP)
17.4 % (2016)
Data Source: The World Bank
19

20. Manufacturing Value Added (% of GDP)
Source: The World Bank
20

21. Source: World Bank.
GDP Growth Rate (Post Reform)
21

22. INCLUSIVE GROWTH
Study Source: ORF Special Report, 2017 22

23. GROWING INCOME INEQUALITY
Source: Brac Institute
of Governance and
Development
23

24. INDIA- Is Modi the Savior?
Artist:Satish Acharya 24

25. BANGLADESH-Quest for a working Democracy?
Source:The
Daily Star 25

26. Q/A SESSION
● Will India see the Modi Magic?
● What is your view on the GST reform in India?
● Will Bangladesh be another case of Middle
Income Trap?
● What can Bangladesh do to Diversify its
export?
● How will the Climate Change Affect both
Bangladesh and India’s Growth?
26