Decentralising economic development in India and the emergence of growth centres

Since the demise of its principal trading partner, the Soviet Union, at the end of the Cold War in 1989, India has been grappling with immense changes that have befallen its economy. In addition, the domestic financial crisis of 1991, the decrease in Overseas Development Assistance and the Gulf War of 1991 added pressure for India to reform and liberalise its economy. The mixed command economic model that India had been sustaining for over four decades since independence in 1947 had left it trailing behind the dynamic economies of East and Southeast Asia. Searching for answers to improve its economic performance and development, India began to turn to the East and Southeast Asian economies for answers and lessons. However, the Developmental State Model (DSM), as adopted by the East Asian countries, was inappropriate for the Indian economy because the DSM was conceived in a different environment to that in India and also did not make provision for intra-state regional development as what was emerging in India. Similarly, the Growth Triangle Model (GTM) that was first mooted to explain regional tripartite development among Southeast Asian countries also could not explain fully the Indian case. Using the emerging trade linkages and economic cooperation between India and Singapore, a new model of economic development termed a Growth Centre Model (GCM) was established. Unlike the GTM, the GCM covers regional economic development between countries not in geographical congruity. The viability of the GCM is shown in Singapore's flagship investment project, the Bangalore IT Park in the state of Karnataka in India. The thesis will demonstrate that the Growth Centre Model will be a more viable model to explain India's unique situation