Not surprisingly slow growth and neglect of human development also led to a

Not surprisingly slow growth and neglect of human

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22. Not surprisingly, slow growth and neglect of human development also led to acomprehensive failure in poverty alleviaton. 23. The headcount poverty rato, which measures the proporton of poor people below an ofcially defned poverty line, was broadly constant between the 1950s and 1977 —78 (see Table 2.4, and Dat and Ravallion, 2010). a.In the early 1950s, more than half the populaton was below the poverty line,a situaton that remained unchanged 30 years afer independence.b.Since populaton growth was rapid, this implied large additons to theabsolute numbers of poor people. The number of people in poverty rose by Downloaded by Vicky Gupta ([email protected]) lOMoARcPSD|3929542
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around 120 million over the period—from 210 million to 330 million (see Table 2.4). PARTIAL REFORM SINCE 1980: THE POLITICAL BACKDROP 1. Congress(l) and Mrs Gandhi returned to power in January 1980 in the middle of a drought , an oil-price shock and a macroeconomic crisis. 2. According to Bhagwat and Panagaria, by the mid 1970ss, evidence that the rapidly expanding government controls had closed nearly all avenues to growth was visible and at least some within the government began to recognize the need for unwinding the system. a. A process of ad hoc and piecemeal liberalizaton strictly within the existng policy framework therefore soon got underway. b. According to VJ the crisis response was very diferent from what had happened in the previous crises in 1965 and 1973. c. The government tried, and largely succeeded , in undertaking an adjustment without cutng public investment but with the help of a large IMF loan . d. Public investment rose as intended but the fscal positon deteriorated . 3. Politcal ly there was increasing tension , mainly because of a separatst movement in Punjab . This eventually led Mrs Gandhi to order the army to storm the Golden Temple in Amritsar, which had become the militants' headquarters. In revenge, she was assassinated by two of her own bodyguards in October 1984. Congress(l), led by her son Rajiv Gandhi, won a natonal electon , already scheduled, on a wave of sympathy, with a massive near-four-ffhs majority in Parliament. c. Rajiv Gandhi had a modern, managerial style and wanted to shed the ideological baggage of the past. He took a number of liberalizing measures in his frst two years in ofce. But the reformist phase did not last long . d. The turning point came in 1987 when his reputaton was brought into queston by allegatons of corrupton relatng to the purchase of artllery from the Swedish frm, Bofors. There were other difcultes too, including a massive agitaton, led by the Bharatya Janata Party (BJP), to demolish the 16 th century Babri Masjid that had allegedly been built on the site of the birthplace of Lord Rama. e. Faced with manifold personal and politcal problems, Rajiv Gandhi lost the impetus for economic reform . He called an electon in late 1989, hoping to get a new and convincing mandate. The Natonal Front, a combinaton of various Oppositon partes, campaigned successfully on the issue of corrupton, and Congress(l) sufered a humiliatng defeat. In December of that year, V.P. Singh formed a minority government with parliamentary
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