Endogenity and exogenity: India's growth strategy

Contemporary growth theories have opened-up different dimensions of growth strategies which the developing and developed countries are pursuing. While endogenous growth model emphasizes on intensive cultivation of domestic skill and knowledge for adopting innovation and attaining higher production, the open economy model lend support on international cooperation and multilateral trade for rapid growth and development in a neo-liberal frame-work. In a endogenous frame-work inclusive growth strategy seeks to strike a balance between supply and demand in the over all sectors of the economy in which agriculture, industry and services sectors open the opportunity of income and employment generation. External trade and multinational - led capital flow and production structure are the characteristics of exogenous growth pattern. The latter growth strategy remained us the vicissitudes of south-east Asian countries in recently times. As the endogenous growth theories emphasize on human capital development, this is a long-term process heavily loaded with high growth rate of population. In the early stage of Indian economic development a state of Harrodian capital--intensive strategy was adopted with the avowed objective of building capital base for rapid development. Over decades the building blocks of heavy and manufacturing industries have been built-up which the propelling forces of growth are now. On the other hand, human capital and infrastructure received unequal importance which acted as a drag in Indian economic growth. At this stage globalization Indian economy began as a part of economic reform. The endogenous strategy has yielded place to neo-liberal open economic strategy. Indian economic growth received new impetus under this new strategy of globalization. The experience of tiger countries imparted lessons for India; she followed somewhat cautious approach in liberalizing and globalizing her economy. Here also the sustainability of the present high rare (9.4 p.c.) of growth depends on inclusive programme which again embraces the skill formation, infrastructure development and poverty eradication. The Eleventh Five Year plan therefore attempts to combine both the endogenous and exogenous strategy. Innovation, infrastructure and poverty eradication are the key components of the present strategy of Indian economic growth.