Constitution and Erosion of a Monetary Economy: Problems of India's Development since Independence (Gdi Book, No 3)

Ever since Shaw and McKinnon published their path-breaking works on financial development in 1973, there has been extensive research on the effects of monetary and financial policies on economic growth of developing countries. This book puts forward a new paradigm of monetary development theory along Keynesian lines. The approach is substantiated by providing a fresh perspective on India's economic development after Independence. Book Cover......Page 1 Half-Title......Page 2 Title......Page 3 Copyright......Page 4 Contents......Page 5 Abbreviations......Page 7 Summary......Page 8 Part I Theory of Development under Conditions of a Monetary Economy......Page 14 1 Money in Development Theory......Page 16 1.1 Definitions and Methodology......Page 17 1.2 Money and the Monetary Economy in Different Schools of Development Theory......Page 21 The Monetarist Approach......Page 22 The Structuralist Approach......Page 29 1.3 The Role of Money in Monetary-Keynesian Theory......Page 37 2.1 The Problem of Constitution......Page 50 2.2 The Dilemma of Development under Conditions of a Monetary Economy......Page 67 Monetary Income Generation......Page 68 The Dilemma of Stagnation and Erosion of a Monetary Economy......Page 84 2.3 The Role of Government......Page 104 Government in a Monetary Economy......Page 105 Regimes of a Monetary Economy......Page 108 3 Implications for Development Policy......Page 118 3.1 World-Market Integration as a Means of Developing Domestic Markets......Page 119 3.2 Macropolicy as a Means of Developing Domestic Markets......Page 125 3.3 The Financial Sector in Monetary Development......Page 133 Part II India’s Monetary Economy since Independence......Page 144 4 The Development of the System of Economic Policy......Page 146 4.1 Phases of Development since Independence......Page 148 1947–55: Transition to sovereignty......Page 149 1956–66: Contrived expansion and impending crisis......Page 151 1967–80: Persistent crisis management......Page 154 1981–90: Attempts at reform......Page 159 4.2 The Regime of India’s Monetary Economy......Page 164 5 Problems of India’s Development as a Monetary Economy......Page 176 5.1 Stagnant Income Generation......Page 177 The Contribution of the Public Sector......Page 179 The Contribution of the Agricultural Sector......Page 183 Excursus: Labor Productivity and Profitability of Production in India......Page 188 The Contribution of the Industrial Sector......Page 192 5.2 Repressed Inflation......Page 200 Selective and General Credit Policy......Page 201 Repressed Inflation and Liberalization Policy......Page 205 5.3 Disintegration of the Financial System......Page 211 Development of the Financial Sector Following Independence......Page 212 Financial-Sector Development and Repressed Inflation......Page 220 Attempts at Liberalization and Reform......Page 232 6 Ways out of India’s Monetary Crisis......Page 236 6.1 Macroeconomic Stabilization via Sustained Reform Policy......Page 237 6.2 The Adjustment Program and its Mid-Term Prospects......Page 240 External Objectives of the Program......Page 243 Monetary Objectives of the Program......Page 244 Fiscal Objectives of the Program......Page 246 6.3 Currency Reform as a Prerequisite of Macroeconomic Stabilization......Page 249 Notes......Page 256 ANNEX......Page 286 Annex A: Development of economic indicators......Page 288 Annex B: Money and Credit......Page 294 Annex C: The Government Budget......Page 298 Literature......Page 302 Economics, Finance, Business & Industry Book Cover 1 Half-Title 2 Title 3 Copyright 4 Contents 5 Abbreviations 7 Summary 8 Part I Theory of Development under Conditions of a Monetary Economy 14 1 Money in Development Theory 16 1.1 Definitions and Methodology 17 1.2 Money and the Monetary Economy in Different Schools of Development Theory 21 The Monetarist Approach 22 The Structuralist Approach 29 1.3 The Role of Money in Monetary-Keynesian Theory 37 2 Development under Conditions of a Monetary Economy 50 2.1 The Problem of Constitution 50 2.2 The Dilemma of Development under Conditions of a Monetary Economy 67 Monetary Income Generation 68 The Dilemma of Stagnation and Erosion of a Monetary Economy 84 2.3 The Role of Government 104 Government in a Monetary Economy 105 Regimes of a Monetary Economy 108 3 Implications for Development Policy 118 3.1 World-Market Integration as a Means of Developing Domestic Markets 119 3.2 Macropolicy as a Means of Developing Domestic Markets 125 3.3 The Financial Sector in Monetary Development 133 Part II India’s Monetary Economy since Independence 144 4 The Development of the System of Economic Policy 146 4.1 Phases of Development since Independence 148 1947–55: Transition to sovereignty 149 1956–66: Contrived expansion and impending crisis 151 1967–80: Persistent crisis management 154 1981–90: Attempts at reform 159 4.2 The Regime of India’s Monetary Economy 164 5 Problems of India’s Development as a Monetary Economy 176 5.1 Stagnant Income Generation 177 The Contribution of the Public Sector 179 The Contribution of the Agricultural Sector 183 Excursus: Labor Productivity and Profitability of Production in India 188 The Contribution of the Industrial Sector 192 5.2 Repressed Inflation 200 Selective and General Credit Policy 201 Repressed Inflation and Liberalization Policy 205 5.3 Disintegration of the Financial System 211 Development of the Financial Sector Following Independence 212 Financial-Sector Development and Repressed Inflation 220 Attempts at Liberalization and Reform 232 6 Ways out of India’s Monetary Crisis 236 6.1 Macroeconomic Stabilization via Sustained Reform Policy 237 6.2 The Adjustment Program and its Mid-Term Prospects 240 External Objectives of the Program 243 Monetary Objectives of the Program 244 Fiscal Objectives of the Program 246 6.3 Currency Reform as a Prerequisite of Macroeconomic Stabilization 249 Notes 256 ANNEX 286 Annex A: Development of economic indicators 288 Annex B: Money and Credit 294 Annex C: The Government Budget 298 Literature 302 Pt. I. Theory Of Development Under Conditions Of A Monetary Economy. 1. Money In Development Theory. 1.1. Definitions And Methodology. 1.2. Money And The Monetary Economy In Different Schools Of Development Theory. 1.3. The Role Of Money In Monetary-keynesian Theory. 2. Development Under Conditions Of A Monetary Economy. 2.1. The Problem Of Constitution. 2.2. The Dilemma Of Development Under Conditions Of A Monetary Economy. 2.3. The Role Of Government. 3. Implications For Development Policy. 3.1. World-market Integration As A Means Of Developing Domestic Markets. 3.2. Macropolicy As A Means Of Developing Domestic Markets. 3.3. The Financial Sector In Monetary Development -- Pt. Ii. India's Monetary Economy Since Independence. 4. The Development Of The System Of Economic Policy. 4.1. Phases Of Development Since Independence. 4.2. The Regime Of India's Monetary Economy. 5. Problems Of India's Development As A Monetary Economy. 5.1. Stagnant Income Generation. Waltraud Schelkle. Published In Association With The German Development Institute, Berlin. Includes Bibliographical References.