India’s New Economy: Competition and Decentralization

Jati Sengupta
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Jati Sengupta: University of California

Chapter 6 in India’s Economic Growth, 2005, pp 172-202 from Palgrave Macmillan

Abstract: Abstract Three principles are important for India’s new economy, the three C’s: the principle of Competence, the principle of Competition and the principle of Comparative advantage in trade. Each of these principles emphasizes the role of economic efficiency and productivity improvement in stimulating growth. The first principle deals with organizational efficiency: how to improve economic efficiency through restructuring of organizations and realigning managerial skills. The second emphasizes the efficiency gains from competition through market enhancing and cost effectiveness. Borrowing the best practice technology from abroad and adapting it to the domestic framework are possible strategies by which firms can gain market efficiency here. Finally, the comparative advantage principle emphasizes how to maximize economic gains from international trade by taking advantage of its comparative advantage in some goods and services. For example, India currently has a comparative advantage in IT goods and services such as body shopping and IT consulting, since it is relatively intensive in the supply of skilled IT manpower. However competition from other NICs in Asia is intensifying and there is a great need now for India to restructure its exportable services toward applied business applications and software package development.

Keywords: Comparative Advantage; Core Competence; Income Elasticity; World Economic Forum; Body Shopping (search for similar items in EconPapers)
Date: 2005
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DOI: 10.1057/9780230505322_6

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