Liberalisation

In a recent article published in Finance and Development, an International Monetary Fund magazine, three economists have critically evaluated the policies the IMF promotes. They acknowledge evidence that suggests that economic growth under neo-liberalism is difficult to sustain, that it leads to an increase in inequality, and that continuing inequality is harmful for sustainable (or continuing) growth.

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Even as it is confronted with the likelihood of negotiations on competition policy after the Cancun Ministerial of the WTO, India is in transition between its Monopolies and Restrictive Trade Practices (MRTP) Act and the new Competition Act. This paper undertakes a detailed analysis of various aspects of this situation. It first reviews a series of recent judgments of the Supreme Court that have set aside orders of the MRTP Commission, depriving it of extra-territorial jurisdiction and the power to restrict imports, and curbing its tendency to adjudicate 'fair' prices. Section II examines the Competition Act, especially several amendments that were introduced as it was being passed, including one that explicitly arms the Competition Commission with the authority to impose import restrictions, and several others that will be self-defeating or difficult to implement. While these two sections employ standard economic theory and comparisons with contemporary international practice, Section III adopts a more historical approach, examining the political economy of competition policy in various countries, and its limited scope for serving distributional objectives in the Indian context. Section IV argues that the case for a WTO agreement on competition policy is greatly overstated, and that India should ally with other developing countries to block such an agreement. On a more positive note, while amendments to the Competition Act are implied by the analysis of Section II, the two succeeding sections develop criteria for exemptions from its provisions.

This paper attempts to assess the changes in workforce structure and the system of governance associated with macroeconomic reforms and their impact on the rate and pattern of urbanisation in India. The analysis of development dynamics in the 1990s shows that there has been an all-round decline in the growth of employment. Income growth and incidence of poverty have been extremely uneven across states. Thus a slowing down in the rate of urbanisation and concentrations of demographic growth in developed states seem to be the logical outcome. The process of urbanisation has also become exclusionary in nature, as only a few large cities with a strong economic base are able to raise resources for development, leaving out small and medium towns.