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Wednesday, December 07, 2005

India's new highways

The New York Times has run four articles in four days, by Amy Waldman, on new roads and their impact on India.
Read 'em before NYT makes them unfree! I share their fascination with the transformative power of roads.
In 1997, I had written a piece in Business Standard, titled Gains from (internal) trade, which was about how the standard economists `gains from trade' argument was being played out as India shifted from a political union of provinces that were economically aloof, to an economic union where trade freely took place within the country. I think a major theme in the last five years has been that of obtaining gains from trade through improvements in telecom, roads and now airports. (See this article by Ashok Malik on frictions of trade, and violations of no-arbitrage, between Assam and the mainland).
While the infrastructure is faring well, the fiscal system still throws up huge internal barriers to inter-state commerce. I think the Goods and Services Tax is the central element of solving this problem.

1 comment:

  1. Hello Ajay, it is great to have you blogging. I was researching on internal trade for my blog piece and came across this. I have always liked your brilliant clarity of thought and opinion. Would love to have analytial policy pieces from your end, there is a dearth of it on the Indian blogosphere! All the best for your effort!

    From a CCS ex-researcher,


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