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A Case for Constructive Destruction in Indian Economy

The previous blog focused on the problems created by the impeded exit in the agricultural sector of the Indian Economy. This blog focus would be on describing the problems of exit.

Describing the Problem of Exit

  • Exhaustive documentation and quantification of the exit problem are difficult.
  • We will instead illustrate the problem by a  partial listing. In what follows, we cite and briefly discuss (Box 2.1) instances where exit has emerged as a serious constraint.
  • There are many ways to measure the exit problem. For the sake of simplicity and consistency, we use some simple metrics.
  • Box 2.1 documents in greater detail the exit problem for certain specific sectors.

Why is There an Exit Problem? 

It is useful to understand the exit problem in terms of analytical categories because it aids in the search for solutions.  In India, the exit problem arises because of three types of reasons, what might be called the three I’s: interests, institutions, and ideas/ ideology.