Formal versus Informal Institutional Change in India's Growth Acceleration

Abstract

It is now commonly understood that India's growth acceleration began in the late 1970s to early 1980s and predates the 1991 economic reforms. While India's rapid rise as an economic power in the world is widely recognised, the reasons for India's recent economic growth remains fiercely contested. This briefing suggests that formal institutional changes were the key to India's growth acceleration, even though these changes did not seem particularly growth enhancing (as in the case of bank nationalisation) or that radical (as in the case of trade reforms) at that time, and in the context of the major economic reforms of 1991