India’s Long-Term Growth Experience:Lessons and Prospects

As a result of the rapid growth taking place in India since 1980, the country has transformed itself from the world’s 50^th ranked economy in nominal US dollars to the 12^th largest in 2003. However, on the one hand when income is measured with regard to purchasing power parity, the Indian economy occupies the 4^th place but on the other hand there is also enough evidence which indicates that income inequality is on the rise and the disparity in average per capita income between the rich and poor states is growing. Election results at the national and state level suggest that unless the issue of growing income and standard of living inequality is tackled upfront, there is a risk that the economic reform momentum unleashed might slow down.