Jean Dreze and Amartya Sen have done a great service to the nation by pointing out how the government’s GDP-centric policies have been at odds with the goals of (a) holistic human development and welfare of all citizens, especially the poor and marginal classes, and (b) sustainable protection of the environment (Putting Growth in its Place, Nov 14). However, as all agree, the country’s fast-paced population growth since Independence resulting from the absence of any meaningful (voluntary) population moderation programme is a significant factor behind the degradation of our natural resources and environment as well as the inadequacy of civic infrastructure and other services and amenities. Therefore, one fails to understand why the duo has not touched upon this. Similarly baffling is the absence of any comment on the malaise of corruption, since corruption-free delivery of civic and other services must rank high among all indices of social welfare and citizen satisfaction.

Divya Kumari, New Delhi

The common man is paying for the lack of vision and dedication of our leaders to the welfare of the people.

K.R.S. Swamy, on e-mail

It would be interesting to analyse how the fourfold increase in public revenues in two decades has translated into greater national welfare, either generally or for the poor.

Ashok Lal, Mumbai

It’s ironic that you should do a cover story on unequal growth and a few pages down the line have an article on the popularity of food shows on TV.

Varun Dambal, Bangalore

We have allowed the rich to get richer by unfair means. Competition to the elite is curbed. Only the politically connected succeed in any sort of business; a poor man with a good education can at best work for such types as a top management executive in this country.

Kiran Voleti, Chennai

The current government is too busy saving face than doing any real work on policies. What we need is concerted effort but we lack the will to do that, so it will be the same for a few more decades. With caste, religion and region added to the mix, it’s going to be one fun ride in the future.

Nithyanandam K., Chennai

While the impressive economic growth in India may have contributed to topline GDP growth, the benefits have not percolated down fast enough. Are the imperatives of a liberalised market economy fundamentally incompatible with development? No. Sri Lanka, which has worked on a market-based economy, has certainly done better than all in South Asia. Fundamentally, India’s lack of progress in health, nutrition and education is largely because of poor governance at the national and state level. Yet, those who have set out to focus on human development (such as Tamil Nadu, Kerala and Himachal) have done well. TN’s infant mortality rate at 31 (per 1,000 births) is better than all the neighbouring South Asian countries except Sri Lanka. Its maternal mortality ratio is five times better than the current development poster child: Bangladesh. Life expectancy at birth is better than all South Asian nations except Sri Lanka. And the state has actively embraced private sector-led industrialisation, IT and services.

K. Anand, Bangalore

Instead of HDI, if expanding girths and spending on clothes and shoes were made indicators of prosperity, India would outshine the whole world.

Prem Ballabh, Delhi

Across the country, there are worrying trends in rural-urban immigration and the possible impact on agricultural production. I speak for Karnataka which figures prominently on the podium of farmer suicides, yet won the agricultural award for highest production in coarse cereals last year despite floods and other inimical factors. It also plans to host an agro-business summit, its ad featuring the whole state ready to be carved up and used as a private laboratory for international firms. The thrust is on organic farming but the reality is a total sellout by the government. A prominent channel just days ago shamed the state by horrendous images of children dying of malnutrition in Raichur district. The government must focus on “sprinkling” the seeds of prosperity all over the state and not set up ambitious targets for a “mall a mile” to compete with Gurgaon. Already Karunadu is a Kallaranadu (land of thieves), let it not become a Kanishtanadu (land of the wretched).

Anoop Hosmath, Mysore

A much-needed article in a country where the middle and upper classes find it tough to critique the “shining India” tripe espoused by much of the corporate world and its acolytes in the state and mainstream media. Just a couple of thoughts, though. With regard to comparisons with China’s efforts to foster inclusive development: despite its higher growth rates and more successful social policies, it too is battling problems of endemic inequalities between the burgeoning urban middle class and the poor from rural/remote areas who migrate to urban centres providing cheap labour for export-driven factories. Back in India, there may be huge employment opportunities in our cities for the skilled as well as unskilled rural populace due to two decades of liberalisation that saw SEZs, industrial parks and mega cities. Sadly, the governments and industry seem to have created those opportunities at the unfair price of measly wages and near-deprivation for a vast majority of our rural migrants, who live precariously in our cities sans access to quality housing, sanitation and health facilities, besides the struggle for a decent wage. Inclusive development policies thus need to address structural inequalities in the economy that are causing large-scale migrations and would require a steadfast focus on encouraging an equitable, sustainable agrarian economy in the rural areas.

Ranjana Ramachandran, Chennai

The problem is that our sarkari economists including Montek, Chidambaram and Pranab do not consider poverty alleviation and equitable distribution as a mission from the top.

Somshankar Bose, Madison

A lot of Prof Sen’s statements in the article are based often on his political position, not his economic expertise, and cannot be accepted uncritically. He does not, for instance, mention that poverty has fallen substantially in India between 1980-2010. He also says the pace of improvement in India has been slower than in Nepal or Bangladesh. This is false. The pace of improvement in Indian social indicators has been quite respectable by global standards; many, if not most, Indian states are on track to meet some of the millennium development goals on reducing child and maternal mortality and extreme poverty significantly from 1990 levels by 2015. On maternal mortality, a recent paper in Lancet finds that India is one of the few countries that have recorded a “substantial decline” in the rate in 1990-2008, the rate of fall being double the global average. Of course, India’s record on social and human development remains dismal—if you look at the absolute levels of the relevant variables instead of the rate of change in recent decades. For one, it is found societies with higher ethno-linguistic heterogeneity and social divisions have worse public policies and invest less in what economists call “public goods”. Two, the government of India spends enormous sums of money on things it calls “social welfare” but which are actually various kinds of handouts to relatively privileged social groups. So, we’ll never have the kind of money needed to build a world-class public education or healthcare system. Prof Sen also picks the “corporate sector” for censure. Without supporting “crony capitalism”—which involves an individual corporate cosying up to a (possibly corrupt) politician to obtain illegal favours, can we be a bit more generous to Indian entrepreneurs? Despite all the red tape, corruption and lousy infrastructure, they do a brilliant job and have ensured that India’s moved from being a basket case in 1990 to a widely respected global economic power today.

Prof Mitra, Chicago

India’s dismal performance on social indicators is despite central share for programmes in the social sector, including agriculture, often going up by almost 10 times in the last decade. So, one can’t say there has been a “neglect of elementary education, healthcare, social security and related matters in Indian planning”. But what does one do when these funds are siphoned off by corrupt politicians and bureaucracy at the state level? We certainly need more government teachers and doctors but what if almost half of them are absent, and busy in private practice? It is deplorable that neither the GoI nor the states monitor and measure absenteeism regularly. The article talks about errors of inclusion and exclusion in identifying the poor, but when did we last measure this? Six years back, in 2004-05. When was pds last evaluated? Nine years back, in 2002-03. Surely, more frequent assessments by GoI could have put pressure on the states to improve delivery.

A recent evaluation of ICDS in Gorakhpur by the NHRC showed that despite Supreme Court orders to provide hot cooked meals, all centres supplied only packaged ready-to-eat food, which had only 100 calories, as against a norm of 300 calories, and 63 per cent of food and funds were misappropriated. The food being unpalatable, half of it ends up as cattle feed. However, such reports, though few, are never discussed in state assemblies, as they meet now for less than 30 days a year. We need a new law making it compulsory for Parliament and assemblies to meet for at least 150 days a year.

Moreover, state governments actively encourage reporting of inflated figures from the districts, which renders monitoring ineffective and accountability meaningless. Jean and Amartya’s paper shows 43.5 per cent children are underweight, of which 17 per cent are severely malnourished. However, the state governments report 13 per cent children as underweight, and only 0.4 per cent as severely malnourished (India Human Development Report, 2011). One district collector, when confronted with this kind of bogus figures, told me that reporting correct data is “a high-risk and low-reward activity”!

Therefore, the main issue Jean and Amartya should have discussed is how to push governance reforms in the rogue states that believe in the looting of national wealth for their own benefit and are, by definition, uninterested in professionalism and accountability. A pliable and unskilled civil service is actually desirable from their point of view—IAS officers dependent on the regime’s discretionary largesse are tempted to become corrupt, cannot quit their jobs, and ultimately become the regime’s accomplices. Providing financial assistance from GoI to such states without linking it with performance and reforms appears to me a waste of resources. Maybe Jairam Ramesh should consider direct cash transfer in such states rather than allow the loot of NREGA funds.

Incidentally, the authors are gung-ho on the Kerala model, forgetting that two-thirds of primary and secondary education there is provided by private-aided schools, and almost half the people have shifted from government to private health service in view of the deteriorating performance of the former.

Your cover story Whose Growth is it Anyway? (Nov 14), by Amartya Sen and Jean Dreze, eminent economists and humanists par excellence, must have come as an eye-opener to the votaries of ‘India Shining’, and certainly to the likes of Montek Singh Ahluwalia and Manmohan Singh. Sen and Dreze have established what these eminences know but won’t admit or accept in public—that there indeed is growth, but for 80 per cent of India, it’s negative.

For Putting Growth in Its Place (Nov 14), we need to put in place a few things like proper grassroots-level administration, a balanced budget every year (both Union and states), expedite pending cases in courts, and reformulate India’s master plan, to begin with.

I have a different take on this article -- The numbers show an utter failure of the folks in Cong. who are handling the welfare part -- namely, the useless NAC. The growth centric part of Govt. is delivering and giving ample money and the welfare part of the Govt. (NAC) is an utter failure -- Its high time such group is thrown out! ..

I also claim that the terrible figures are contribution of states where growth hasn't touched, namely the BIMARU whereas other states have improved significantly. The authors should have compared the capitalistic states of Gujarat, South India etc.. vs the socialistic states like Bengal, BIMARU etc. I'm sure the improvement would be significant in the capitalistic states.

It seems that the data on which Mr.Amartya Sen based his opinions and research may be  at least 5 year old as has been pointed out already by someone.

It is true that a lot has to be done for health care and education , that is ., increased revenues accrued to the Govt. due to high growth rate of economy, has to be directed to develop in these areas. But the responsibility to spend judiciously and arrest corrupt practices lies with States ,obviously there are a few corrupt ,rogue states and they were far behind other states in India in education and health care. The worst one of them is Bihar.

This is same,  may be with any country.

Japan ,when it started developing , its Nikkei index went from 650 to 24000. But only 10% of population , perticularly middle class  became super rich tycoons while rest of the populations ended up as emplyees working for them  leaving beghind 2% population extremely poor.

The country perticularly when it is a democratic county it can only provide more opportunities for the youth and other hardworking people to grow.  Democracy has got its limitations.

But we indians have a "peaceful" way of living or it is ingrained in our blood. For example when middle class realised that public education system is collaped as far as they are concerned , they "peacefully" and transparently shifted to private education , and the private sector education system bloomed like thousand flowers making even some corporates very which.

For example I went to public system of education , to Govt. schools and colleges for all of my education but I could not even imagine sending my daughters to a govt.school because , I found only dirty rooms, goats,sheep and buffellows along with children from slums and offcourse, the teachers would be conspicously obsent and the building was so old that I feared that it might collapse any time. Who goes to Govt.school in a city like Hyderbad or even in district HQ ?? Let Kapil Sibal tell us.

But middle classes, our intellecutuals , our revolutionaries never questioned it, never took out any public demonstations of their anger or frustrations. They simply,silently shifted to a private schools like me. Then who goes to Mahatma Gandhi hospitals ?

 A good insight by the world renowned Economist.

To put growth in its place, we need to put in place the following things:

- Proper grass root level administration

- A balanced budget every year (both Union and States)

- Expedite pending cases in courts. Disputed wealth would be back to use.

- Re-look and re-formulate India's master plan

- Put to best use, the available natural resources

These are the areas that can be looked at and ensuring this means that growth will follow.

I think I will do some research and will come back with detailed response.

Ramakrishnan2
NY, United States
 

You often post to expose your enormous ignorance blended with unfathomable arrogance. Every country including India puts institiutional effort and resources to collect economic data in a reliable manner. ( Data gathering and interpretation is backbone of policy planning I hope you know). Statistical methodologies are being used for decades in data interpretation.sample surveys are conducted by the government, private institutions and academics. Their methodologies are discusssed and refined. There are thousands of competent professionals in government and reputed private organizations who research on this. It is not difficult to know the sources of information, the data gathering process and the methodologies. However, if the findings contradict to what you wish these should be, you choose to trash the research, the professionals who conduct them and the academics who cite them. Is it an educated opinion in the first place? I already objected to your ridiculous idea of Harvard and offending comments about Sen. But with the comments like above I doubt your mental maturity.

M.K Sani

 It's  fashionable to trash Nehru these days for everything without knowing the historical context. If I defend Nehru for some of his policies , I do not necessarily endorse all policies that Congress follows or have followed. It will be wrong if you refuse to acknowledge the beneficial impact of subsidized higher education that gave social mobility to millions who formed the Indian middle class. (Nehru's fault of not doing enough for the primary education as you rightly pointed out is well documented. Illiteracy especially in the rural area is still attributed to the faulty primary education policies taken after independence,)  Nehru's dream of industrial growth driven by the public sector companies didn't come true. Except for a handful of corporations most of the public sector enterprises were/are inefficient and incurred huge losses to the taxpayers' money. Yet the same public sector institutions also provided the middle class livelihood for lakhs of people working there. We can't ignore that as well.

I do not defend a prolonged socialistic policy, but would always argue that things were not as simple in those days and many of the failed initiatives also helped build foundation of a non-extant middle class. Driving out our ghost of socialism started in the Congress era and the same path of market based reforms was followed during the NDA and UPA rule. I don't see any major differences in the economic thinking of Congress and BJP at this point.

Narendra

Caste based reservation in educational institutions is nothing new and has been continuing for two generations now. It's become more painful for the general candidates in recent years as the proportion of quota doubled. It's frustrating but all of us had to go through stiff competition due to limited availbility of seats in good colleges coupled with further limitation of general seats in a quota regime. Although number of seats has gone up over the years, so also did population of young Indians. But this should not be justification for any meritorious student to trash all state sponsored academic institutions.

I agree with you on the resource crunch in Indian state funded colleges. However, I also hold  low opinion of the quality of education in privately funded colleges post liberalization. If the state colleges are suffering from the shortage of resources then private colleges are suffering because most of them are money making schemes of politicians and they seldom spend on quality resources. There is dearth of good teachers everywhere. Also private colleges tend to concentrate on education in professional courses like engineering. Except for Indian School of Business we are yet to see formidable challenge from private colleges to noted state institutions.

You may spend a lot of money to private college of your choice. (Your college would have charged you a lot more in the absense of the government  support for academic institurions in land acquisition etc.).It'll be wrong to assume that others from less affluent families can afford the fees. They need lower priced public colleges. (Availability of bank loans for higher priced education is over-rated. Banks lend based on their assessment of employment opportunities of the student post education and not because of any philanthropic reason.) 

Private initiatives and government efforts go hand in hand -they can complement but can't replace each other.

 India has a strong position if all economic indicators are compared

Economy at a Glance: http://knoema.com/yxjlccc#India

Per capital Government Debt: http://knoema.com/zeczygg#India

An insightful article much needed in a country where many in the middle and upper classes of society seem to suffer from an inability to critique the "shining India" tripe espoused by much of the corporate world and their acolytes in the state and mainstream media. Couple of thoughts. One, with respect to the comparisons drawn out with China’s efforts to foster inclusive development, I would argue that, even the Chinese state, despite its higher economic growth rates and more successful social policies, is battling problems of endemic inequalities between the burgeoning urban middle class and the poor from rural/remote areas who migrate to urban centres providing cheap labour for export-driven factories. The phenomenon of migration is a huge feature of India’s uneven growth story too, but I did not find the scholars make a mention of it in this article.
There may be huge employment opportunities available in our cities for the skilled as well as unskilled rural populace as a result of two decades of economic liberalization that bore witness to promotion of Special Economic Zones, Industrial Parks and Mega Cities by both centre and various state governments.Unfortunately, the governments and industry seem to have created those opportunities at the unfair price of measly wages and near deprivation for a vast majority of our rural migrants, who live under precarious conditions in our cities without access to quality housing, sanitation and health facilities, not to mention the struggles they undergo bargaining for a decent wage that guarantees meagre savings. Inclusive development policies, therefore, among other objectives, would need to address structural inequalities in the economy that are causing large-scale migrations and would require a steadfast focus on encouraging an equitable and sustainable agrarian economy in the rural areas.

I wonder why these types of studies are done and who funds them?
How they get data from different countries? Most of these countries don’t even collect enough data, so how do they draw different conclusions? May be finally they will show that situation improved after implementation of some programs financed by IMF, World Bank or some useless UN agency.
Majority of these celebrity economists are from rich and developed countries, they have won numerous noble prizes in Economy, they have written millions of books about economy still their big economic houses are crumbling, why?
These highly intelligent Economists were not able to see Tsunami of economic recession and economic slowdown, what are the reasons? But they keep writing how others should manage their economy, don't you find it suspicious?
For me, either they are not big economists or their country is not in recession (same like one can’t claim to have best health facilities with best medical doctors and still having epidemics all around in the country)
Hope India won’t take advices from these failed economists.
 

Thanks MK Saini.,

The paper is based on information which is blatantly false. Indias statistical department is so unreliable that GDP figures are doubtful. if you want to assess real info then check associations like automobile, cement, electricity, consumer goods production data. Econometrics is part of official unreliability.

It is true that tribal areas remain extremely poor but if they want to continue with their old ways then things wont change. But instead of trusting the data used by Sen it is better to compare key indicators like production of cement, steel, two wheelers, TV, Mobile, food, milk etc. The consumer items reflect surpluses in households.Bank deposits or land prices can also give good idea.

I think I will do some research and will come back with detailed response.

What kind of economists are these gents? They havent mentioned anything on the need to control the burgeoning population of India. Even if one was to implement the steps mentioned by them, where is it all going to end, if the population exceeds the resource allocations?

@DC

All universities and colleges got funding and support from the governments. A doctor graduated from a state medical college, a BA in History school teacher, a B Tech from a state/regional engineering college, a BSc graduate working as a chemist - all are beneficiaries, although the amount of financial support varied.

that may amount to a few million people. The Indian educational system was alway known to be lopsided.  But even today we don't have 100% literacy. Even the Chinese Commies achieved 100% literacy. The Nehru Congress model was designed to keep the majority illiterate and have a tiny educated class

@Ramakrishnan2

Whole of the data for other south Indian economis other than India is bogus. Even Indian information is not correct. But the information for bangladesh, nepal doesnot even exist.

Whole of the data for other south Indian economis other than India is bogus. Even Indian information is not correct. But the information for bangladesh, nepal doesnot even exist.

I would agree -  and comparing India with Bhutan is unscientific. Pakistan doesn't have an accurate count of its population and its latest attempt to do a census is turning into open warfare.

Indian statistics are based on small sample sizes and scaled up with a whole lot of assumptions. Some may be true, some not. Some are imported.

Sorry read south Asia instead of south Indian

Whole of the data for other south Indian economis other than India is bogus. Even Indian information is not correct. But the information for bangladesh, nepal doesnot even exist.


Whole of analysis is based on false analysis. Bangladesh dont know how many bicycle or fans or radios are sold. This type of econmics is just a stick to beat opponents who hold a different view.

Narendra what you proposed is technically doable but more complex with more people involved. So again I believe a recipe for more corruption. I am personally not in favor of yet another ID. To be honest I don't think the current one ID per Indian (Aadhar) is that great an idea. I think it will be more misused that used, including by the government itself. The reason a social security number works in countries like US is there is a long history of privacy laws, laws actually work and violations result is quick redressal including by the courts. We may have laws but given the state of our police and judiciary they just don't work. Most of us don't think of taking help of the police or the courts until and unless left with just no other choice because we know it is more hassle than worth it.

Alternatively, Charitable donations already come with tax benefits. Education institutions and hospitals can also get themselves registered if they truly do provide services to the "poor". This will suffer from corruption too but about the same level as today. It will at least not increase. I am very weary of more items for tax rebate and more laws because it will just be recipe for more corruption in our present state.

@Narendra

I fully agree with what you say on the outrageous "reservation  policy" for so-called backward classes entrenched in the system ever since Ambedkar formulated it and further accentuated by VP Singh's Mondal Commission. In fact it is so ridiculous that I know two cases where people have changed their surnames to "qualify" as scheduled class to get jobs. There is large scale corruption in practice in this area. This is pulling the country down not only economy factors wise, but in all respects.  There has been growing resentment in the society about this reservation and hopefully one day there will be backlash to abolish it. Of course, some of us living overseas fail to see the full impact of that reservation factor on the nation to its detriment.

Regarding voting pattern, there is the grass root, or micro-level, aspect no doubt where people vote for their caste party.  But at the macro-level, that is in the large scale picture, governments are changing in India in a democratic way. If there is an election called now, Congress will lose power in the center. In WB the CPM was dealt a crushing blow recently. Even in the past as I noted Congress lost under Indira Gandhi and Morarji & Co came to hold office.  And only when Morarji Co messed up the country Congress was elected back again in 1980s and so on.  Thus I am optimistic in the long run that someting good will emerge after trial and error for a better political class to rule.

There is always that distinction between the micro and macro level analysis in economics or politics.  I hold the view that in the overall picture the Indian society has made great strides "economically" to uplift their standard of living over the years in contrast to India's neighbours. I am not an economist, but that is what I see as a layman.  

The scolarly analysis presented in this column has not taken into account the background factors relevant for such a conclusion. Scientifically and technologically, India is far ahead of all her neighbours. To repeat, even if a fraction of India's military expenditure going on could have been channeled into building hospitals, schools, sanitation, water supply etc etc in the country side, it would have triggered a far better standard of life for the population at large.  The economists do not run the economy of a modern industrialised nation. It is run by the technologists and engineers on one side and by the farmers on the other side. The economists play a background and limited role in this context - they devise fiscal policies of a nation, such as the interest rates set by the reserve banks, budget papers, money circulation etc.

The Nehruvian planning in the past wrongly fell in the hands of the economists of the nation. The technologists and farmers were relegated to a secondary role to contibute for the nation. That is why it did not bring the "honey to flow" as Nehru said in his speech on an independence day ceremony. That is why the Nehruvian planning was a failure economically in the past. But forced to fight wars, India has learned the hard way how to run the economy  after long struggle. I am positive that in a decade's time, if such an economic analysis as presented here is undertaken again, all these numbers will show differently giving a entirely different perspective of the Indian nation in contrast to her neighbours.

M K Saini

IITs may be in the limelight, but these are not the only beneficiaries.

All universities and colleges got funding and support from the governments. A doctor graduated from a state medical college, a BA in History school teacher, a B Tech from a state/regional engineering college, a BSc graduate working as a chemist - all are beneficiaries, although the amount of financial support varied.

Mistake in my prevous post

"the beneficiaries of Nehruvian socialism model only went to a few."

that should read:

Only a few were beneficiaries of Nehruvian socialism model

@dc

Government is the enemy #1 is a blatant lie, we all are beneficiaries of the government for some reason or the other. Millions of college educated Indians who constitute the affluent middle class today are or were beneficiaries of Nehruvian socialism

the beneficiaries of Nehruvian socialism model only went to a few. Granted in India that may mean a million people over the years. But the combined annual output of the IITs is less than an top engineering college in the West. 

this is the congress model of governing. Ration out resources and have everybody fight over them. Provide large numbers of "choke points" and all energy is spend overcoming them

This model does not scale up. It only worked when there was a tiny middle class and a large village population who followed their age old rituals and practices.  Now things are changing, everyone wants a piece of the action. But this model of governing is not changing.  This I think is why government efficiency seems to be declining.

Reform will be difficult. For starters we need to get rid of the IAS, its unsuited for modern day conditions.  But this lobby is entrenched.

'Government is the enemy #1 is a blatant lie, we all are beneficiaries of the government for some reason or the other. Millions of college educated Indians who constitute the affluent middle class today are or were beneficiaries of Nehruvian socialism (as media calls it). If the college education were not highly subsidized, the students from ordinary low income families could never achieve socio-economic mobility. '

Oh come on, save for a few IITs and perhaps 60 other colleges, Indian colleges lack even the basic infrastructure,IT courses hire lecturers who don't even know Basic Java, etc.

Graduates from the bulk of Indian colleges are a little better than American High school passouts.

Most middle class Indians have had NO access to colleges that could even be called 3rd tier colleges in the US,UK.

And the select few that DO have the necessary infrastructure, reserve 50% seats for SC/ST's OBCs, actually its much more than that in Tamil Nadu.

And when people want to introduce foreign, good quality universities in India, the left shrieks that they'll lure away quality lecturers.

I'm sorry, what exactly is a student born in an Open category supposed to do, what would the left have him/her do?

I can't compete for 50% of IAS posts, Medical posts in Govt hospitals, I'm not even supposed to pay pursue a decent college degree in private universities?

I don't think any parent would have a problem saving up 10 Lakhs for his/ her son, provided he can study in a decent college, and there are Banks eager to offer loans, so, no I don't need the Government.

Me and my siblings forked out a good 80 K per annum for a quality college, so, no, I have nothing to thank the Government for.

Secondly, I never said anything about the better off not helping the worse off, read Arun's post about education cess, Tax rebates for paying for the poor.

@Arun and DC

We can prevent fraud by labelling each receipt with a Transaction ID, and the private institutions like the schools and hospitals can maintain a special database for these Transactions, not to mention providing India's poor people with another ID, so as to make sure this scheme is not abused by the affluent.

The IT department can then access the details of the transaction for the receipt and then verify that the candidate has indeed paid for the service and grant him that rebate.

Reservation may not be the right solution , but whether meritocracy should ignore the issue of social injustice is a debatable matter.

Ehh?,

1.How is it Social justice when a meritorious, but poor candidate form the Open category loses out his job to a rich kid from the so-called Backward caste.

2.How is it Social justice for the 100 poor(most likely BC) people get treated by a lousy Doctor, get taught by an underqualified teacher?

Just to provide employment to that one, that's RIGHT, just ONE, candidate.

I'll explain this until, the brain dead left gets it.

i)Reservations hit social services hard, more AA mean that the lousy Public sector goes from bad to worse.

ii)Poor people depend on these services more than the Open category

Conclusion:

Poor people get worse services under AA.

How exactly has appointing underqualified candidates for the IAS improved the lives of the poor people of India?

The most objectionable part of any right wing agenda is to demonise the government when right wingers need to pay taxes and never to acknowledge that they are also beneficiaries of government policies for their own economic welbeing.

No we're not, read again and again, about the state of colleges in India.

Till date there are 86 responses to this article...that means people care about India's economy and its path forward. There are many sides to the argument but it definitely sounds that the current path is definitely a path of doom. The question is then why is the government continuing to persist the same policies? Is it because they realize that once out of power they will never have a chance to come back? Is this the scorched earth policy of MMS looting army out of Delhi? It definitely has the colors and textures of a political party, which knows that history books can only be authored and written at this time to control the damage that is about to reveal itself after it leaves. Is it why it published a motivated history of its party?

Narendra

Before you take an absolute stance, please debate with yourself about your own ideas. Government is the enemy #1 is a blatant lie, we all are beneficiaries of the government for some reason or the other. Millions of college educated Indians who constitute the affluent middle class today are or were beneficiaries of Nehruvian socialism (as media calls it). If the college education were not highly subsidized, the students from ordinary low income families could never achieve socio-economic mobility. 

Note that socialism in 1950s was not unique to India but existed in all developing nations through 1960s and prescribed even by the World Bank at that time. A post colonial India deficient of resources, almost non-extant manufacturing base and small size of private sector  indeed gained from the 5 year planning model. However after setting its economic fundamental following 200 years of colonial rule,  India during Indira Gandhi regime instead of liberating the market forces came up with a draconian permit-license Raj to exercise excessive state control and achieve political dividend. It only gave us incompetent governments, colossal losses of an unaccountable public sector, and economic sufferings of all Indians due to poor economic growth. We all know that the market based reforms should have been introduced about a decade earlier. But that does not trash all the achievements of 1950s to set the country on a more stable (albeit weak) economic footing .

I do appreciate your frustrations of otherwise meritorious candidates becoming victims of politics of reservation. Reservation may not be the right solution , but whether meritocracy should ignore the issue of social injustice is a debatable matter.

In another post I  elaborated why your idea of only voluntary private initiatives to help the poor is not a practical solution.  Even now you can take a tax benefit in India by donating  to a charitable institution that works among the poor . Unfortunately, every moneyed person is not as generous and philanthropic as Bill Gates and Warren Buffet. People may choose to pay taxes instead of making charitable contributions. Donations from individuals in any case can hardly match financial resources of the state. More importantly, there is rampant corruption in producing fake charitable contributions (and fake HRA receipt). How can a voluntary initiative through tax inducement that is also vulnerable to corruption replace a systemic approach funded by the state? You need more engagement of a responsible and reformed government in social sector, not its complete withdrawal or its replacement with volunary private initiatives.

The most objectionable part of any right wing agenda is to demonise the government when right wingers need to pay taxes and never to acknowledge that they are also beneficiaries of government policies for  their own economic welbeing. "Privatize the profits and socialize the losses" is the real mantra of the right.

very good article.I have also read the book (Argumantative Indian) written by respected Amartya Sen.I thinksome of our leader, politician,policy maker of the country should read that article to gain some knowledge.

Let's take Malaysia and Singapore as examples,

Is the ethnic Malay better of in Malaysia which offers him unfair privileges or is he better of in Singapore which is more meritocratic?

@Arun,

That's an idea, we need to come up with more ways to reduce dependence on the Government, it's the enemy, not the friend.

Public schools can't hire teachers who can even spell 'Sunday'.

Another idea is to let the creamy layer in the OBC category compete in the said quota.

Because at the end of the day, it is the system that is the ability of the institution to provide quality services to 100 poor people that is much better than an intstitution which hires one unqualified person at the expense of 100 poor people.

Narendra ... "We get a tax rebate for uploading JPG files for our HRA receipts as proof of our residence fees. We can apply the same practice to all employees who've paid for a poor kid's education, healthcare, we simply upload the receipt as proof that we did."
 

Another recipe for just malpractices and corruption. HRA misuse is one of the most common items of salaried working class cheating to cut down on taxes since the salaried middle class hs very few options to save on taxes. Even those who claim to be pristine pure and teflon coated, if you dig enough you will find HRA misuse.

All that will happen with your proposal will be mostly false receipts. They are available dime a dozen.

Even charity donations in India is fraught with malpratices.

My thought therefore was to see if Education Cess can be better directed and utilized. Cess is something we pay - if we pay taxes we pay. Can we say in it's disbursement? Personally, I would like to give the Cess I pay to Premji's education initiative or Parikrma a great school system in Bangalore for the underprivileged built on very sound principles of equality and self confidence.

@Pinaki

The reason for the low HDIs is none other than our old friend, Affrimative action and our voting patterns.

Before I'm denigrated by the left, let me explain.

Take the public hospitals for example,

The idiots in the comrade camp, recommend that we hire doctors from the unprivileged castes in order to lift this BC out of poverty, regardless of competence, now the better qualified does lose out his post to somebody less qualified than him, a caste discrimination that is allright with the Marxists.

But what of the patients who depend on public hospitals for basic care?

Does it make any sense to have 100 unprivileged people treated by a incompetent doctors putting their health at a risk over hiring a competent doctor to treat these patients?

Who is the biggest loser again?

The same applies to Government schools, bureaucratic posts, everything that has reservations.

Why do you think the Government turns to the comparitively meritocratic for everything?

From handling insurgencies to rescuing kids stuck in the well to , heck, even building bridges.

The only kind of Socialism that ever worked was the meritocratic Right wing Socialism in Germany in the 1930s, and you know how close we are to acheiving a system like that.

 As for the voting patterns, most Indian voters don't vote on the basis of comepetence, so if a Health minister performs poorly at his job, he can still get reelected if a certain community is partial to him, take a loot at 90% of our politicians and you'll know what I mean.

India's diversity is a curse, someone mentioned Himachal Pradesh as a successful, diverse society, well, an exception doesn't make a rule.

I'm implying that,

Does anybody here work for private companies?

We get a tax rebate for uploading JPG files for our HRA receipts as proof of our residence fees.

We can apply the same practice to all employees who've paid for a poor kid's education, healthcare, we simply upload the receipt as proof that we did.

Tax rebates for paying for social services, we just eliminate the middle man, the incompetent lazy Government babu.

Everybody knows that our public sector is nowhere near to getting its act together.

There is much to be pessimistic about India - in fact it is probably the easiest thing to do. As a culture there is just so much wrong with us that at least I know I get overpowered with hopelessness frequently - doesn't really matter if the problem is Hindu caste, Muslim invasions, European Colonialism, Nehruvian socialism, whatever.

But then I remember 2 instances and I feel there is a definite change and reason for optimism within the gloom, tomorrow will be better than today. The people in these instances aren't looking to be nation sitting at high tables of the world, an aspiring super power, whatever. They just work harder today than yesterday to make a decent living and provide for their families without expecting someone else or the government to dole them out.

1. Around 2004-05, I recall taking a taxi. The taxi driver looked quite unlike your typical taxi driver - he was tall, regal looking with an air of confidence about him. I asked him from where he was. He said Rajasthan - a small non descript village with not much going on. He did three things everyday - do interning in a machining shop in the day (learn his chosen trade from experience), drive taxi in the afternoon (to fund his studies) and study at ITI in the evenings - 16-18 hours day everyday. His dream was not a government job but after diploma start his own machining shop. He wasn't tied to his family's state for his future. This to me appeared very unlike Indian. Much more common - this attitude, effort and self confidence in the US but not India - where government largesse and how to divide the slice more in your favor by the accident of your birth is still the dominant theme. Can this be encouraged in more or those who come with this come with it and those who don't don't (and we are just stuck with more of those of don't and hence our solutions need to be limited to that reality)

2. There are stores in my area (called fancy stores carrying mostly made in china stuff) and also normal appliances/kitchen utensils stores. All of these started and owned by families who migrated from Rajasthan during the boom. These guys speak Kannada so well you cannot tell they aren't locals. They also retain within their families their culture. Great shopkeepers - great customer handling and service - always a smile - whether you wanted a Rs 1 item or one for 1000s. From all appearances very successful and spreading. It is as if a few villages have taken over this trade.A confident people, making life in an alien land and environment, both adapting to it and retaining their core. In a latest experience, I interacted with most likely the daughter of the owner. She came across as a bright chirpy street smart 12-13 year old studying in the local neighborhood school. The way she was handling herself with customers and others who worked (elder brothers, cousins, uncles) was such that jokingly I asked - Are you the manager? She said not yet but I will be one soon enough. Again can this be encouraged and supported to be more the norm than the exception?

 Adjoinder to my post # 77: please read for

"... ushered a new political vista in the villages"

the following:

"...  ushered a new economy and consequently a new political vista ...".

To clarify the point I wanted to convey is that military budget is a heavy burden on Indian economy at this time and has been over the past years. None of India's neighbours carry such economic burden. Pakistan's military is heavily financed by the Saudis and other sources in the middle east whereas India has to bear all the costs herself. The Bangladesh war cost India a fortune.

Hence, the statistical data presented here should be interpreted as very favourable for India taking into account the overall picture of national politics and strategic environment. But the military expenditure should also be looked upon as a long term investment for the Indian state and could bring dividends in the future. For example, if India succeeds to have a foothold in Afghanistan, she could have a bite at the pie of the huge mineral wealth loomimg there. India has recently had a tiff with China in the coasts of Vietnam where Indian naval ships were sent for oil exploration in the sea bed. Such a venture could bring a windfall in future, but would not have been possible without strengthening the Indian navy.

This all confirms the Clausewitz's thesis for a nation like India that politics, military and economy hang together. American economy has landed in doldrums for fighting the war in Afghanistan. One cannot get a full view of the economic performance of a nation basing on economic data sheet only.

For students and teachers of Economics and especially Indian Economy, the arguments advanced in this article on the country's  spectacular Growth and and painfully slow Developemnt processes during the last two decades of Liberalisation are all familiar. Hence, they would very much appreciate the  well-known  arguments of this piece.

However, it  should be an eye-opener to the apolitical/unbiased and/or upwardly mobile right-wingers --especially the youth-- working  in the IT/Service Sector who assume that everything is OK with Liberalisation/ Globalisation and Corporate Capitalism.

This, provided they can spare a little time from their busy schedules to ponder over the  lot of the poor, downtrodden, unemployed/under-employed resource-poor people suffering from low incomes and deprivations in education,healthcare, transport, drinking water and sanitation--lot of those who are condemned to live in INDIA THAT IS BHARAT. 

There is one aspect missing in this debate. That has been encapsulated in the Clausewitz principle: Politics, Economy and Military Power of a nation are locked together.

In recent years the Indian Armed Forces are spending billions of dollars in armament acquisitions. These sums of money, if used say for building infra-structure in the country side, could have uplifted the standard of living for the poor and have ushered a new political vista in the villages.

But that expenditure on military is absolutely necessary for the survival of the nation in the long run. Years of neglect and callousness during 1985-2005 with bankrupt foreign policy have left the military in doldrums.  In my view the Hinduwallah BJP is the real culprit in this context.  One example is the following. By talking privately with some military officers over time I gathered the information that after the Sumdorong Chu flare-up with the Chinese (1986) in Arunachal, the IAF recommended some urgent action for infra-structure creation in the area. But their advice fell on deaf ears of the BJP then in office.  It is to the credit of the present UPA, that MMS has sanctioned all such projects across the military for safeguarding the nation's boundaries.  And this inspite of all corruption raging all over the administration. So one sees the imapct of the miliatry on economy and vice-versa. 

 "Since the majority of the poor in India still vote based on caste, class, religion etc. the pressure on politicians for better governance is still not strong." -

This is just a conjecture. I hold radically different view on this matter. The vast majority of Indian voters are politically extremely astute as well as their counterparts in the middle and upper echelons of the Indian society. And remarkably, this is inspite of their illiteracy, poverty and "backwardness" and what not.

This has been proven time and again. Congress under Indira Gandhi first achieved a grand victory in the 1970s, but then was annihilated in the next election with Mrs Gandhi loosing her seat in Amethi. That was a resounding message to the international world at large that Indians are fundamentally democratic as a nation. And that point went down extremely well in European circles as could be ascertained from the news media editorials appearing in that era all over central Europe.

In the subsequent years, Congress was soundly defeated country wide for power holding in the Delhi durbar. BJP was given twice the opportunity to fix the political affairs of the nation. In fact, BJP sat on the thronefor full 10 years. And what did they deliver ? - Absolute chaos and rampant corruption (Pramode Mahajan ?), farmers commiting suicide in Chandrababu Naidu's glorious state , etc etc. 

So there you have it - the Indian mass elected Congress again back to power. Time will tell what happens in the immediate future again. Politically savvy observers take the Indian mass very seriously in so far as their excercise in the ballot boxes.

Lots of things have changed in India in the last six decades. Democracy has rooted even deeper. The exploited classes and castes are getting their political power. Wealth creation has created a sizable layer of middle class that had been non-existent in a society of few very rich and almost all poor people. Industrial and economic progress has also caught attention of the west that had hardly noticed a post-colonial India.

However, surprisingly what hasn't changed in all these years is the functioning of India's government . The MPs and MLAs, the ministers, the bureaucracy and lakhs of government employees haven't changed their way even a bit. They still have little or no work, their pace of work is slow and tardy, there is little if any accountability to the public, bribery is an entitlement for doing the routine jobs, extortion of the powerless by abusing legitinate authority is common and the inefficiency of the system is taken for granted. The so-called economic reforms in 1990s that Indian government takes credit of now were nothing but elimination of several functions of the government to police and misgovern the economy. No wonder  many politicians equate economic reforms with the abdication of the government's responsibility in any economic sector, as if the non-performance of government financed by the tax payers is taken for granted along with its existence with authority but no accountability and responsibility. This machinery operates without any reform of its own. Parliamentarians routinely approve hikes in their own pay and perks , successive pay commissions raise the salaries of government employees irrespective of their performance, political parties continue to buy legislators/parliamentarians to stay in power during confidence votes, new states and jumbo cabinets are created to accommodate more politicians eager to share the gravy train, large inefficient ministries are never downsized to appease the ministers in power and the political scams continue to grow in size in line with the economic growth.

Any improvement of the standard of living of the poor calls for a radical change in the functioning of this machinery. This change can come only when Indians will demand change through large scale political movements. Unfortunately all the established political parties are comfortable with the status quo and are unlikely to initiate any political movement. Since the majority of the poor in India still vote based on caste, class, religion etc. the pressure on politicians for better governance is still not strong. However, Anna Hazare has proven that even outside the partisan politics if an agitation starts with popular socio-political issues e.g.corruption in public space  it could mobilize huge public support.

My own pipe dream is that someday a large population of Indians will demand accountability from those in charge of governance and a large scale political agitation will be launched within or outside the traditional partisan political system demanding reforms of the overall government machinery. Until that happens, any welfare program for the poor will meet limited or no success. That doesn't mean that I recommend the government should withdraw from social welfare programs.

 "My argument here is to debunk the myth that in India the government and the public sector is absolutely bad and corrupt, while the private sector is absolutely efficient and corruption-free."

When you build strawmen as feeble as this, it takes absolutely no effort to debunk it.

GAJANAN GALORE!...

Please post your links on a article about India's famine in 1943 and an article on the critical analysis of Sen's work. We are talking of India's development and Sen/Dreze analysis of the situation. Unlike you we are pretty much aware of the ground realities and an economist's analysis puts the entire picture in sight.Economics is the social science that analyzes the production, distribution, and consumption of goods and services.

So the point is Economics is still a social science!.. Unfortunately, most have forgotten that basic fact. If Economics is not a social science ...it is also a irrelevant science. An economic policy not based on social good does not warrant a department, a minister and 2000 years of theory.

Wake up and read some more!

As a matter of fact,'POVERTY' caused by the ruthless over-exploitation of India by the imperialist power of the world in the past and at present time.

  We are looking at the larger picture, and noticing the small details in the picture. We cannot do both at the same time, and doing both one after the other, makes us forget what we were looking at earlier. What is the problem actually? Looking at how many children are immunized for smallpox, and deforestation, are seen as different issues, but they are seen to be a part of the larger picture. We have neither been able to alter the larger picture, nor the details. Dr Sen and Dr Dreze are identifying the problems, but we cannot do justice to them. 

 The issue is, that deforestation is not avoidable, in a small extent, and the smallpox vaccine is important because children are not all immunized. So, why are we making the problems so important, that we make deforestation a major problem, by felling major forest areas, and leaving many children without the smallpox vaccine, when we can vaccinate them? This is surprisingly happening all over, in every consideration of national interest.

 The reason why the Bangladesh government is working, is because the democratic process has been revived in the near past, and the people will not take democracy nor it's institutions for granted. India takes it's existence for granted, or it's citizens do. The Bengali's in Bangladesh, do not care about the government, but about how the government functions. More importantly, the people are making a difference. People are immunizing their children, if they have them, in Bangladesh, and I assume, they demand immunization facilities from their government. The Indian government is collecting taxes, but how can she make the taxes matter to the people? The taxes are the property of the people, even in a democracy. Ultimately, the government servants are being paid, and government stands on taxation. 

 Ultimately, taxation is not the end of government, but the peace of mind of  the people of that country. I know, that if India was secure from within, and without, then taxation would not be a consideration. 

 The government needs to function, but everything cannot be such a great priority, that the priority takes precedence over the issue. I hope I have been insightful, but I believe, I have been, only to a small extent, perhaps.

 However, it is fruitless to argue about poverty in India. It is abysmal. It stinks

And how do you go about it ? Remain in denial , because some has huge stake in the status-quo. But as  has been said you cannot wish away the fact of poverty. So what do you do ? Shoot the messenger instead of taking a hard look at the message.

This denial industry has a pattern. Discredit personally those who takes the contrarion view.

Last year the denial industry went all guns blazing against enviornmetalists just before the Oslo Climate Conference.. They picked on R.K. Pachuri & calamnised him about millions he mulcted or his $ 10000 suits.By the time the The Daily Telegraph was forced in to an apology to Pachuri, the damage has been done. The ground for deep-sixing climate concerns at Oslo has been successfully created.

Amartya Sen researched famine quite while ago. Madhusree recenty stumbled independently on the same issue through a different route. She wrote a largish book. Not just a tete-a-tete. While at it, she alleged some inaccurate data in Sen's research conducted half a century ago. Some say Sen was correct & some would say Madhusrre is correct. Nobody in scholarly circles dismisses Sen's conclusions out of hand. Her issue with Sen was just a foot-note in her biggish treatise.

Sen & Dreze  here looked at some data from a demi- official source & pointed to kinks in the growth & development story. That wo'nt do. You are not allowed to talk poverty. So discredit Sen & Dreze by calumnising them .Go in a tangent to discredit Sen personally via Madhusree for his crime of telling poverty still exhist. And while at spice it up with some leftist-rightist drivel.

Engaging in a debate on the definition of poverty is meaningful only for political reasons - the left will discredit any achievement on the wealth creation and the right will underplay the flaws in wealth distribution by arguing on the absolute size of poor population. However, it is fruitless to argue about poverty in India. It is abysmal. It stinks.  Even if you don't go to a village to see the rural poverty, which is even more extreme, you can meet poverty in any big city or a small town. Statistics and various  techniques to  estimate or exaggerate or understate poverty figures will not wish our poverty away. So let us not kid about the size of poverty-stricken population - it is huge -suffice it to say.

Unfortunately poverty alleviation like infrastructure development cannot be managed by private initiatives- no matter how large. You can donate to a charity like "Pratham", take your income tax break and assume that the NGO alone will take care of India's neglected primary education of the poor. It cannot happen. You still need the government. True, the government officials are corrupt. But how can you give clean chit to the private hands? The corrupt contractors who loot the money from public welfare projects in collusion with the government employees are private sector outfits. If we generalize all government institutions as equally bad then some of India's foremost educational outfits, business and financial enterprises owned by the government of India should not have been respected for their competence.  Many Indian entrepreneurs who are currently revered as industrialists by Indian media are third rated thieves - ask any banker or investor who had dealt with them in the past. Even in the world of private outfits in social sector, haven't you heard of the dubious NGOs created for siphoning off money and tax credits?

My argument here is to debunk the myth that in India the government and the public sector is absolutely bad and corrupt, while the private sector is absolutely efficient and corruption-free.

Large scale poverty is a serious development  issue- arguing about its size is meaningless. The government's targeted programs are still the best options to tackle large scale poverty. If certain states perform better  in delivering the welfare programs for the poor, the lesson should be that the other states can also upgrade their performance learning from the better managed states. Since corruption is an issue, the schemes need to address it. However, if we choose to discard government funded welfare programs citing corruption or for political ideology, it will be akin to suggesting beheading as the best option in the absense of a better remedy for headache.

India now have 140 million TV sets as per wikipedia. Actual figure may be higher because there is huge rural market for old TV. If average house have 5 members then 70 crore people cannot be called poor. similarly per year 4 crore fans and 53 crore bulbs are being sold. All those who buy fans and bulbs may not be poor.

I concur with recent interview of kaushik basu that government should pay Rs. 12/day to every one in most poor districts like Kalahandi and every one in west bengal to alleviate hunger. This direct transfer will ensure proper quality of food is trasported to them without losses as happened in PDS. They will also save running of 5,00,000 PDS shops which at minimum require Rs. 12,000 per year as expenses. The overheads of PDS at 6,000 crores or it could be 25,000 crores is saved and money is transferred via banks and paid in public meetings.

We must pay Rs.12/day to kolkatans from where we get those poor left liberal seculars who do nothing but comment on gujarat.

Narendra .... I am not sure I understand exactly what you have in mind. However, there is an Education CESS which has been around for a while. Personally, I would like a say in who that goes to. My thoughts were that the Government puts up a list of approved parties in the space of education. When I file my IT returns, I apportion the CESS to 1-3 candidates in that list. Today as always with any money I give to the government I just feel it is wasted and the only reason to give is because it is the "law".

On Healthcare, I just can't visualize a solution at all towards improvement from the present state of affairs.

Gajanan,

        I find your postings/links very interesting as is the discussion on this thread. Please post them here and please do keep posting on it. I've gone through Madhu's book, but not these discussions you posted

Thank you

My reference to Madhushree and A Sens tete -e tete was only to point out that , there is something confusing in the numbers of production of grain.

That does not explain why that issue was relevant here. Giving plenty of web adresses which are famialiar to those who interested does not wash. And 'tete - e tete' ?  Some people do not know what they are talking about!

Rents are higher because of rent contol act.

Bringing in Land celing act will push up property prices because of lack of housing. Property prices are higher in India because of rent control act (since older properties cannot come to the market and lack of rental market). Historic shortage of housing has also created the housing price inflation.

There is a problem of product market competition; thats because primarily for SME's it is very expensive to hire labour (because of labour laws) and poor infrastructure (they cannot afford to have inhouse electricity plants, water etc)  making their fixed costs very high compared to big producers.

But who cares for economic logic.

 My reference  to Madhushree and A Sens tete -e tete was only to point out that , there is something confusing in the numbers of production of grain. I have just said lapse and not derided Sen, Here is a mild exchange between Mark B. Tauger with a  reply by Amartya Sen. 

http://www.nybooks.com/articles/archives/2011/mar/24/truth-about-bengal-famine/

Then if you want as Pinaki Ray says  debunking  says, see the web page of  Dr Peter Bowbrick,

I also do not agree with many points of  Peter Bowbrick  I have been very mild . Just read Dr Peter Bowbricks reports 

http://www.bowbrick.org.uk/index.htm

http://www.bowbrick.org.uk/Famine%20pages/famine.htm

 Post # 58:

"What is your point?" -

Excellent point !

I could not make any "point" out of that gobbledygook excepting for noting the following:

 "This is surely a serious lapse for an Arguementative Indian." -

In other words, how to debunk Amartya Sen NL !!!

The Bengal Famine in 1943 has absolutely no relevance for the theme of this column ! 

@narendra

TN and Kerala have far better HDIs than in the bovine belt, Himachal Pradesh is a second world country in its own right.

Himachal Pradesh is also ranked second to Kerala among states with the least corruption, atleast according to Transparency Internation. I wonder why that is - HP is not mono-cultural, its as fractured as any Indian state. The neighboring Uttarakhand state has a similar culture and history but its a middle performer in HDI terms.

Kerala state is no 1 in HDI in India. W. Bengal state is around 19. Yet both have been dominated by CPIM culture for decades. What gives?.

Corruption is a serious issue in India and it seems till the Anna Hazare movement came along, the bureaucratic class colluded with the leftist types to suppress this. This whole article is really case in point.  We may still have to rely on foreign media for anyting like the truth

Wall Street Journal:

World Bank Disgrace

"Yet nothing we've seen so far can compare to what has now been uncovered about five health projects in India, involving $569 million in loans. "

In the $54 million "Food and Drug Capacity Building Project," for which money is still being disbursed, the INT found "questionable procurement practices, some of which indicate fraud and corruption, in contracts representing 87 percent of the number of pieces and 88 percent of the total value of equipment procured." That is nearly $9 of every $10 in aid funds.

New York Times

The first doctor to die, a senior government health administrator, was shot on his morning walk last October by two men on a motorbike. Six months later, his successor, a cardiologist, was shot to death while out on a predawn stroll. A third government doctor, accused of conspiring to murder the first two, was found dead in jail in June, lying in a pool of blood with deep cuts all over his body.

The one thing the doctors had in common? All three had at one point been in charge of spending this city’s portion of the nearly $2 billion that has flowed to Uttar Pradesh, India’s most populous state, as part of a nationwide push to improve the health of India’s poorest citizens.

This is Afghanistan level of looting. The more government spends in the social sector the more funds get looted. It seems like the state adminstrators are determined that the target population should get nothing.  What is alarming is that the entire system colludes in this - from inspectors to health professionals to contractors. There is simply no understanding of the concept of duty.

But there was no mention of anything like this in the article. Instead it was a dull, dry sarkari type report, oblivious to ground realities. What was the point of the article?. Was it calling for another grand centrally sponsored scheme?. 

 On that point I agree with RamaKrishan2.  Spare us from the mediocity.

DC,
Qualifying for harvard is only 94 percentile and median is 97 percentile  GMAT. There are scores of 99 percentiler in IIT in one batch. My close relatives have joined MBA. Other courses are much easier.

But you missed my actual point. The DATA about poverty is highly questionable. Second tribal population is not trying to change its life style and there is no way you can bring them above poverty line.

The milton friedman variety of economics works on efficiencies gained because of competition. The economics of left while good for better distribution also promote lethargy and loss of efficiency. for example Competition is now pushing Indian manufacturer like Bajaj and TATA for fuel efficient vehicles but in licence era they never bothered about this quality. Material conversion efficiency though small in initial days becomes very large after few years. that is the reason russia failed and china changed.

WB is prime example of how left liberal BS has pushed the state in to poverty. The attackers of NaMo who criticize Gujarat day in and day out always skirt the issue of 20 infants dying every day. 


But the poverty figures are highly questionable. Except for east UP, Bihar, Jharkhand, Orissa, WB and eastern states, rest India show very little demand for NREGA jobs. Even state of MP considered to be among poorest have no takers for NREGA because average wages are much higher than NREGA offer.


But my solution is totally different from what economists suggest. My observation is government spends money in projects which are jobless. The Road, Power plant, Mines every thing is given to high networth group who after buying imported equipment then transfers the money for aquiring foreign assets. Whole of this economy just uses Indian loans but foreign equity and bypasses India to benefit Indian people. Solution is obvious:

Tax bigger groups a competiton tax so the SMEs gain market share.
Instead of bunching tenders for bigger quantities the works should be split and parcelled out to smaller but competitive firms.
There should be internal competition between government departments and two seperate entities should call tenders for same job and lower one should get the job to execute.
Increase Income Tax from 30 percent to 60 percent for rich.
Impose Wealth Tax
Bring back Law on land ceiling. The resultant inflation because property prices have become 100 times in 40 years thus pushing rental component on trade is huge. The net prices of vegitables or food sold in markets carry this component of cost push.
Income Tax as percent should be lower in proportionate to Indian public holding. This will push for promotion of Investment culture and more peoples fund will come to market and it will not be looted by mutual funds.

A smooth transition to real competition from crony capitalism will push money towards middle class who will higher more goods and services from poor benefitting whole economy. Thats what Occupy Wall street also says.

GAJANAN,

What is your point? Are you saying something we should be paying attention to? Are you saying you are as demented as the rest of the Congress government?

The second point comes through quite well. The first point does not!

The problem with counting the poor is the target given to each state, that you would have these many poors only. How can they define poors themselves without doing an actual survey? This is farce and totally unjustified. States are redefining povery lines, so a poor in one state may not be a poor in another, why this discrimination?

Omesh Bharti

Modhusree Mukherjee vs. Amartya Sen controversy over Bengal famine  is well known. Madhusree puts the blame squarely on the British  archtypical colonialist Churchill. Sen arrives at the conclusion that democracy is better equipped to handle such famines & had their been a democracy, the '43  Bengal famine could have been avoided. There is no fundamenal issue in this controversy. Rest is scholarly cribbing.

So bringing in a entirely different matter in context of the current essay is mischievous & motivated. Jean Dreze is intimately involved in the current Indian poverty issues who also recently resigned from NAC & co-authored this essay. Besides Sen, views expressed here are also that of  his.

@DC

I DO want better HDIs, we ALL want better HDIs, but do read Fed Up's post on the culture factor, TN and Kerala have far better HDIs than in the bovine belt, Himachal Pradesh is a second world country in its own right.

Sen,Roy and other leftrards know too well the reason behind India's poverty, India's Socialism is not meritocratic, you either need connections or a caste certificate to get employment not qualifications.

You can only imagine the shrieks from the comrades if we started fixing our bureaucracy by ensuring that only the best get recuited.

They KNOW why Muslims and Dalits lag behind other communities(especially the ones who lost their homeland in Pakistan), they KNOW why we have such horrible Government hospitals.

They know that this is not mono-ethnic Germany, Sweden where politicians get elected for the sole criteria of competence and efficiency, or which is likely to hire the best doctors(any public sector employees) available, not based on your surname.

Do we really think that the Scandinavians would ever vote for a Digvijay Singh, Jyoti Basu?

Indian society is too diverse for its own good, I doubt whether we'll ever vote for politicians based on competence.

In the short term, we can offer Tax rebates for Private company employees for paying the fees for poor students, treatment at private hospitals, and other such social services that can be fulfilled by private companies.

But other than that, I see no way to fix the Indian public sector.

There is a reason why MONO-ethnic Han China, Bengali Muslim Bangladesh perform much better than India.

Excellent analysis for us to read. The issue of economic growth has several strings that gets pulled in different directions. Prof Amartya Sen presents it very effortlessly for all. Unfortunately, our sarkari economists including Montek, Chidu and Pranab do not have poverty alleviation and equitable distribution as a mission from the top. I am sure they understand the effects of their policies but the indifference in our Sarkari karmachari's mind does not enable him to think except self interest, party interest or sugar papa interest. The least of our problems is finding ideas for addressing the problem. The biggest problem is "who will bell the cat". Here belling the cat means, stemming corruption, making governance accountable, etc etc. but that is democracy and we are living in a feudal, midivalist, anarchist republic. I will still try staying positive as adviced by Dr Sen. I hope the Swiss Bank account of Chidambaram, Sonia , Raja, Kanimozhi, Robert Vadra, Raul Vinci Gandhi and Kapil Sibal are frozen some day.

Prof Mitra (Chicago)

I read with interest your posts . As regards economics, I subscribe to the view of another Mitra (Dr. Asok Mitra, the left wing economist/ Professor of ISI - turned politician who became finance minister of West Bengal) that economics cannot exist without politics.. Economic policies of a country reflect the predominant political view of the polcymakers in power, because fundamental assumptions behind any economic ipolicy are shaped by political beliefs. The left leaning economists Sen and Druze  would favor involvement of the government whereas University of Chicago school (or Milton Friedman school?) of right leaning economists will swear by free markets alone. In reality, economists from both sides know that neither the free markets nor the governments have proven to be superior over other under all circumstances. We want state as much as we need free markets for various reasons, notwithstanding the stated or unstated political views of the economists,

For Ramakrishnan2

 With such imbecile comments about Amartya Sen (have you ever seen his resume?) and Harvard/IIT etc.you are not only embarrassing any IIT or IIM  you have gone to but also insulting your own thinking ability as a matured individual. Please read your own posts once again.

For Narendra and others

Development economists Sen and Druze have been researching about India's economic development for many years. So their opinions are not based on a very superficial understanding of Indian econnomy, even after acknowledging their left leaning political views..

India's spectacular GDP growth in the last two decades is commendable, but it should not be a camouflage for hiding many of the long lasting structural problems of its economy. Prof Mitra can rightly point out  that Sen and Druze should acknowledge the progress that India has had on certain economic indicators, while criticizing failures at others. However even then I  wonder if we could even be partly satisfied with the mixed results. Ironically in India's case the state's involvement in all economic sectors has been historically more and not less. But because of our politics of pacifying too many vested interests and the corruption at every level the state's priorities have often been misplaced, and  the targeted programs to address poverty did not meet adequate success. It is not the lack of government involvement but the lack of governance to efficiently run social programs that create India's problems.  OIn the other hand, while cheerleading the economic growth the policy planners are not doing enough to reform the process of delivering the basic services to the weakest section of the society.

Instead of defending our current policies or criticizing their critics, it is  time we figure out why the international development indicators put us well below a large number of developing nations anywhere in the world. All the super power notion appears mere fantasy when we look at our pathetic performance based on those indicators. Interestingly other emerging super powers have not been as faulty as us to ignore the basics.

Guys, I was just thinking, how about a tax rebate for anybody willing to pay for the education for less privileged schools in competent private schools, same for poor people in the Private hospitals.

This looks like thew only solution, because there's no way to fix the merit-starved Public sector.

Your thoughts,

The artilce clearly highlights that there are two India's.India of malls,cafes,latest style cars from across the world giving a false illusion that all is well and the nation is booming.The real India often hidden or to be more precise ignored is different. To the millions of poor life is hard and a struggle for daily survival. We only need to go out a few miles from any major city and see that not much has changed.If any, the little they had has either dwindld or sometimes as is the case vanished.We  talk of inclusive growth. If one sees the disparity the claim sounds hollow. Our experts unfortunately live in their ivory towers and 5 star ambinece and draw plans which is only alienating more and more citizens.Is that is why more people are living in slums in urban areas and farmers are commiting suicide in the rural areas.

The challenge in India of why primary education and healthcare does not get attention is that

The poor have a voice only during election and they are struggling with day-to-day survival, primarily food issues that too to fill the stomach (forget nutrition, etc.).

The middle-class does not need these services because they have affordable alternatives, e.g., decent private schools (to start with courtesy of the so called convent schools).

The rich of course don't need these as public services whether India or anywhere in the world.

Unlike say in the US where the middle-class does need "public" education as a service. They have made healthcare work differently for themselves. In Europe on the other hand, the middle class needs both education and healthcare as a public service.

Hence, India's policy makers right from the beginning whether socialist Nehru or reformist MMS, who primarily come from the elite (rich) and solid middle-class, have never done much except pay lipservice. On top of all this corruption eats away much of the very little that is done.

I can see the primary education scenario changing somewhat with efforts of the likes of Premji. Healthcare I am not very hopeful. In fact, I think things will get worse before and if they get any better given the level of greed is increasing in the Doctors and Hospitals too. May be one day the middle-class will be large enough to count as an electoral factor and also healthcare unaffordable given cost escalations in the sources current used for the middle-class and hence in need of decent healthcare as a public service.

I recall when I first came to Bangalore, I was told lots of doctors charge patients based on their ability to pay (and they treat the poor as well their middle-class patients not very different). That they also do 1 day/week or more of free service for the poor, especially rural poor. Seemed like a good thing in the absence of anything better. Though this approach of the doctors probably is neither institutional nor scalable. But I suspect with the current generation of doctors this has probably changed (and hospitals anyways always look to pass the poor around).

Finally, law has to work - so that the % quota in primary schools for the "poor" and similarly quota in hospitals to take care of those that cannot afford actually has teeth and it works. Today I am sure there are a million ways to get around it.

Compared Indian agricutural history goes back to milleniums , I can't say how many. By independence our farm land is already fractured & of course cultivable land to population ratio is extremly poor. There is absolutely no way this fractured land usage can be converted in to large farms.

farm sizes in the UK and Europe are also large, yet they also have been farming for millienia. The minimum economic size of a farm in the UK is around 500 acres, yet it also has a very high population density. Average farm size in India is declining and this has  nothing to do with neo-liberalism. There is a crisis developing there. 

It is generally accepted the population is becoming urbanised across the world, even in India. This is not a neo-liberal wet dream. Pakistan for example is slightly ahead of India in respect to this trend. One of the motivations behind programmes like NREGA is to slow down this trend by inventing farm related work and slow the migration to the cities.  Or what were vilages will become towns and towns become cities. 

Some NREGA work may be useful (like water management), some not.  One the other hand it might be better spent on improving infrastructure in the cities becasue if we ignore this trend we will just get bigger slums. But thats a policy decision not up to me and thats all I'd to say on this subject.

It basically means that vast land tracts are set up in the multi-storied formation allowing the same plot area to have multiple crops on different 'floors'.

Avery interesting piece of information. Would you also please enlighten us how photo-synthesis is simulated ?

There has been remarks here about US farming , its large ranch type agricuture , mechanizastion , productivty & above all their low employment generation. Possibly triggered by my stray remark about farm subsidy US . Someone even went overboard to remark that eventually farming in India will employ 5-10% instead of 60- 70%.

The red herring in this line of argument is US farming. Putting US farming pardigm side by side with that of India is to ignore the historycity of farming in the two countries. When colonists came to the Americas they got themselves almost uninhabited continents & capable of parcelling out large tracts of land among a people who were nowhere near in the Indians in numbers. And of course as someone here rightly  mentioned land to population ratio in young US remained high.

Compared Indian agricutural history goes back to milleniums , I can't say how many. By independence our farm land is already fractured & of course cultivable land to population ratio is extremly poor. There is absolutely no way this fractured land usage can be converted in to large farms. ( Indians corporates are going to strife-torn African regions to aquire lage farms).

So predicting land employment based on  the US experience is non-sequiter, irrelevant. Someone said generating 100 miliion jobs  in the next few decades is the way out. He has been careful not to say from where these 100 million jobs will come  & vaguely mentoned 'in a few decades' . One hundred decades ?

Even if these 100 millions jobs are created by sorcery of neo-liberal sleight of hand, what about the the balance 700 milion ? Leave to them to decay in to hungry oblivion?

The point is who needs investment climate most ? The 800 hundred million Indians in the countryside. Yes they are not as enterprising as Dhirubhai Ambani or Narayana Murthy . But first they must keep body & soul togather to become enterprising . It happened in our lifetime. The green revolution was largely state incentivised. Current zeal to create ' investment climate' for a few cronies , larger mass of the people were given a go-by. I never said industrial develoment or incentives to industry is not neccessary. The issue is neglect of the 80 %, leaving them to their devices.

 Making a few malls and some roads does not mean that the country is growing. Growth should be measured by how people live, and if we do so, we will not see a very nice picture. 

Tragedy of India arises from soft government. unconcerned people of India.Indian by nature narcissus  they are interested only their family and kins.Whole world go in hell they not concern.Indians depend too much on authority.Every thing government must do.Indians are very selfish  they want everything free and not concern of their duties..how an we remove the poverty.?

RICH are becoming RICHER while POOR are becoming destitute in India. Need to be delt  on war footing else could lead to "social uprising" threatening nations stability itself.

-- Commence to subsidise farmers directly by money transfer, as is practised in some advanced nations. If else allow farm produce to be sold at market price. When there is a bumper crop of onion farmers suffer due to poor price but when price of onion go up "export is promptly banned" and price forced down.

-- The RICH should not be subsidised. Subsidised Diesel should be only for public and goods  vehicles. All private Deisel  vehicles upto 1200CC should be TAXED "Rs 10/ per CC engine capacity per year" and above 1200CC be TAXED "Rs 20 per CC engine capacity per year". Insurance Firms be made to collect this TAX as minimum third party insurance is mandatory for all vehicles and needs to be renewed every year.

-- GOVT also shouldn't be subsidised by OIL COMPANIES. Armed Forces, BSF, CRPF, ITBF and other Govt Vehicles should be made to pay actual price of Diesel, Kerosene, aviation fuel etc  to oil companies.

-- Lastly get the LOOTED INDIAN BILLIONS from SWISS BANK and use it for upliftment of POOR.

I don't have a Nobel prize in economics but it seems to me that there is a curious omission in the article. There are lots of generalizations about "India" and "China" but I believe these generalizations are meaningless when one is talking about a country as diverse as India with 1.2 billion people.

Here are three facts:

- The fertility rate of the four Southern states (AP, TN, Karnataka, Kerala) is now *below* replacement rate. The population of India is still growing only because people in the Bihar/UP cow belt are still pushing out kids.

- The per capita income of the four Southern states is now 4 times that of the Bihar/UP cow belt.

- Immunization rates for kids in the South is 75-80%. Figures for the cow belt are once again low: 23-25%. http://www.iegindia.org/workpap/wp283.pdf

These are enormous disparities that exist *within* India, and they dwarf the differences between India and Bangladesh which the authors make a lot of fuss about. They stem from differences in the cultures of these two regions of India, in my opinion. But cultural and religious influences are anathema to leftists and Marxists, which is probably why Professor Sen says nothing about these disparities or what we can learn from them, even though I am sure he is very aware of these differences.

In short, this is an interesting article not only for what it says but for what it carefully avoids saying. A pity.

Agriculture is neglected because agricultural reforms have never been an appealing issue even amongst the farmers.

Farming is an emotive issue across the world. But look at the trends - in developed countries a "family farm" has an economic size of 500-800 acres.  It only requires 1-2 people to manage this. In India productive farm land is tied up in 2-3 acre family farms, though they are steadily increasing in size.  Its my impression that fields are getting bigger and bigger and more farm labourers are becoming redundant.

What can we predict about the future. If we look at what happened in the West and Japan,  farm work will take 5-10% of the working population, compared to the 60-70% it does now. So what will happen to the unemployed farm workers, who will number in the 100s of millions.  This surplus population will head to the cities or take up some non-farm related activity. This is already happening.  In other words India needs to generate 100s of millions of jobs in the next few decades.

The only way to stop this is become like North Korea. It will please some I know even though the North Koreans seem to have famines from time to time.

Unequal development results in satisfaction to one section of people and resentment in other.

No real commitment from govts after opening the economy in 90's to fix it.

And current govt busy to save it's face, rather work on policies.

A concerted effort is needed, and I think we don't have the will to do that, so it's going to be the same for some more decades. With caste, religion, regional factors adds up as which is unique to India, its going to be one fun ride in future.

>> "You chose an aside instead of my main contention that for allround exclusive development of the country agriculture must be the point of take off whereas now it most neglected." - Manish

My contention is not very different from yours except that I lay the blame for this gap on the farmers. Agriculture is neglected because agricultural reforms have never been an appealing issue even amongst the farmers.

As I said before, "If one treats our farmers as professionals, there is no doubt that they have failed the country miserably. The idiots who elect their leaders not on the basis of infrastructure, irrigation, roads, electricity etc. but on the basis of caste thoroughly deserve their miseries. " And, this is applicable to most of the rural hinterlands that have "escaped" the country's rapid growth (farmers as well as non-farmers) .

If one considers the fact that the Indian farmers are considered too noble to be taxed, it automatically translates into a 15-25% subsidy of tax exemptions on top of overall agricultural economics. I don't think any other industry in India has that advantage. 

 In continuation of my post # 37 I may add that one the main reason for deadlock in WTO talks is US protectionist policy , specially its agricultural subsidy ; this with the caveat that this not what ai have been talking about.

 That is not only a wrong statement, but also dilutes the fact that USA treats agriculture AT PAR with other 'industries'.

Total farm subsidy of US is a staggarring $ 261926768097 through 1905 t0 2010. In 2010 alone it is $ 15244574948. ( source Bloomberg )

Whether it dilutes parity of  US treatment of agrigulture with industry is something I have not commented upon nor  I am in a position to comment. Similarly I did not comment on nature of agriculture , its mechaniastion , agricultural  employment etc.

You chose an aside instead of my main contention that for allround exclusive development of the country agriculture must be the point of take off whereas now it most neglected.

The same left right rhetoric backed by zero net new analysis that is actually geared towards solving the problem. Per our constitution, education and healthcare are state subjects in India, not central subjects - this should always be the central fact in any analysis. A very large percentage (upwards of 50% in most states) amount of state budgets are already in education and healthcare. The fact that education and healthcare services are still abysmal as the authors rightly point out, is a result of 2 factors - huge corruption and the lack of constitutional authority for state governments to levy a state income tax (and hence fund these large obligations). The latter is a flaw in our constitution, the former needs to be fixed through a lokpal like institution as well as decentralization of accountability and power (giving panchayats the right to fire school teachers who don't show up for instance). I don't doubt the intentions of the authors, or their intelligence but the article is a lot of ideological rhetoric and lacks new ideas or penetrating analysis that are actually geared towards a solution of a well known problem.

We have allowed the rich to get richer by unfair means. Competition to the elite is curbed. Only the politically connected people will get to do all infrastructure and real estate projects. A poor man with good education will find it difficult to succeed as a business man due to lack of capital & the crony capitalists. Only in businesses like Technology where the rich cant rob what is in a poor man's brain will the poor man succeed. The government should give mining to only the Tribals & Scheduled caste people. Except for the lisence, there is no such thing as innovation in this industry. Why should you give that to people like Vedanta or Reliance? They just dig and sell. That could be done by anyone. At the most a poor man with good education can become a top management executive in this country. the government is squarely to be blamed. 99% of the policies have been made by congress or puppets of them for 58 of the last 64 years. we are paying for it.

It is non sense that NY times has good articles about India. NY Times correspondents, who are Indians writing about India have same disparaging attitude about India. Have you seen how Annas movement was belittled by them.

Same idiots at NY times interview  Arundhati Sawant repeatedly.

Pinaki Ray,
 

You have selectively used DCs remarks from a discussion. Same DC later admired me for my views in same discussion. Noble prize is a western view of the world and will never come to any Indian purely on Merit. Indians will never be able to cross glass celing erected by scandinavians who are the biggest racist around.

Presidency Kolakata, St Stepehen Delhi etc are over rated but dominated by Low IQ people. Since they are esteemed by western colleges the students usually apply for Doctoral degrees and migrate. These hyped students has very low IQ as compared to some one from IIT. It is our misfortune that we have to watch Sibal and Arjun Singh destroying temples of Modern India like IITs and IIMs. You can see always how Jairam Ramesh does good job except when he has to take decision on orders from rahul. You must understand getting in to Harvard is easier than getting in to top IIM. A single batch from IIT Kanpur have enough students to occupy Harvard MBA.

People from Kolkata should not BS here about economics. They must first answer about the mess they have created in WB where 20 infants die every day in single hospital. Whole of Indian success story is pulled down by a single state dominated by kolkatan left liberals.

 

And a very ridicuous land tarrif!

Oh! And, I forgot to mention that the farm productivity/ yield in India is worse than even Bangladesh and Pakistan for most crops. In fact, for many crops, an otherwise barren UAE also outpaces India.

We can thank those who were anti-Green revolution, and pro land distribution.

Oh! And, I forgot to mention that the farm productivity/ yield in India is worse than even Bangladesh and Pakistan for most crops. In fact, for many crops, an otherwise barren UAE also outpaces India.

Countries like UAE and Egypt are experimenting with multi-layer farming. It basically means that vast land tracts are set up in the multi-storied formation allowing the same plot area to have multiple crops on different 'floors'. The farmers in India suck!!

The idiots who elect their leaders not on the basis of infrastructure, irrigation, roads, electricity etc. but on the basis of caste thoroughly deserve their miseries.

That, sir, is the truth, the whole truth, the naked truth, and nothing but the truth.

Also add those willing to vote for Islamic boot lickers and those who hire on the basis of caste.

>> "It will not be out of place to mention that in the US where these neo-libs learnt their economic mumbo-jumbo, agriculture is the highest subsidised indusrty." - Manish

That is not only a wrong statement, but also dilutes the fact that USA treats agriculture AT PAR with other 'industries'. Just like other professionals, the farmers have to learn their skills, adopt technological investments and pay taxes in order to survive competition. What helps Americans is the easy availability of land. USA's population density if 11 times less than that of India.

People fail to acknowledge that similar to other areas, there is a wide chasm between the few rich farmers and majority poor farmers, including farm labourers. I see no reason why the rich farmers cannot modernize and improve throughputs. Or, why they should get tax exemptions.

If one treats our farmers as professionals, there is no doubt that they have failed the country miserably. The idiots who elect their leaders not on the basis of infrastructure, irrigation, roads, electricity etc. but on the basis of caste thoroughly deserve their miseries. 

Correction :

Most outside the closed coterie of economists accepts this to be any where near reasonable.

Read :

Most outside closed coterie of sarkari economists do not accept this to be anywhere near reasonable.

but there are a number of statements in this article that are based on his political positions and NOT on his economic expertise.

This is nit-picking . The so called discipline of economics has no leg to stand unless it is married to politics. Every economist's economics is extentions of his political views. It must be kept in mind that the discipline of economics is neither  pure science nor fine art. Economics is politics.

Prof. Sen never mentions the fact that poverty has fallen substantially in India in the period 1980-2010.

That is an incontextual point to make because neither did Sen / Dreaze said poverty level rose. Poverty per se is  relative & subjective . The economists use different a sets of vertcals to measure poverty depending on his politico-economic agenada. For example recently here in India  officially proverty threshhold has been fixed @ Rs.32/- in urban areas & Rs.22/- in the countryside. Most outside the closed coterie of economists accepts this to be any where near reasonable.

The Government of India spends enormous sums of money on things that it calls "social welfare" but which are actually different kinds of hand outs to relatively privileged social groups.

That is an eminently valid point. Welfare & dole do not work specially when no credible delivery mechanism exhists. But a level playing field biased in favor of those to not have access to enterprise climate instead of a system scewered in favor of those who know the government like their palm is required . It is not the case that wealth be distributed by force. The case is incentivise wealth generation at the bottom og the pyramid.

In a democracy, there are different interest groups that are trying to influence policy in their own favour sometimes at the cost of public interest.

Special interest groups would try to influence policy in their favor. The job of politicains & government economists is to strike reasonable balance so that a particular group do not virtually take over governance. Sen has valid point about corporates as  they are yielding disproportionate influence on governance without corresponding commitmet to the society in which they operate.

It would be nice if this magazine also published an Essay by Jagdish Bhagwati or Arvind Panagariya

So you too have favorites ! Fare enough.

@mitra

excellent series of posts.   Growth in India was alway going to be non-linear and heterogenous. The population has got cell phones before it got access to drinking water and toilets and sewage systems (In many or most  cases it still hasn' got them). We all know this. Its not ideal but this the way its going to be. But it still is a cultural shift - now you've seen the possibilties, you demand more.  The old apathy is lost.

 Cell phones of course is the sort of technology that allowed us to leap over the tribalism, zero sum politics and the intellectual poverty of ideas. On a sour note, this is imported technology that is saving us from collapse.

VS Naipual is of course a prescient writer about India. His "Million Mutinies" should be read with his earlier work "An Area of Darkness" to see the change in his thinking. An acute writer picks up on these social changes and Naipaul is one of the best.

@banerjee says

The reason is not far to seek. The fundamentalism of GDP growth is worse than religious fundamenlism.

is this meant to be a joke?

 Only service sector provides real employment. But it is 100% domain of the urban middle class who can afford modern education to fit in.

funny and not true

It will not be out of place to mention that in the US where these neo-libs learnt their economic mumbo-jumbo, agriculture is the highest subsidised indusrty.

agriculture in the USA only requires 1-2 percent of the working population. Agriculture in the US is highly mechanised, capital intensive and jobless. 

Does a supercilious attitude still hide a poverty of thinking in India? Why accuse Ramkrishnan?

I am rewriting and combining my previous two comments.....

Prof. Amartya Sen is obviously a great economist - but there are a number of statements in this article that are based on his political positions and NOT on his economic expertise. That shouldn't be a problem - all of us have political views, so does Amartya Sen. But Amartya Sen's political views are no more valid than mine because he is a great economist - what I mean is that his (undoubtedly great) expertise in economics should not confer any additional legitimacy on his political views. In America, there are 50 Nobel prize winners in Economics - some of them have relatively left wing views, others are tilted to the right. So there is always a good debate between them which helps in clarifying issues for us common folks. The problem in India is that we have only one Nobel winning economist, and he has a left-oriented political worldview which we accept without critical analysis. (By left, I don't mean the crazy Indian left, but Cambridge left). Lets discuss a few flaws and ideological biases (and perhaps even factual inaccuracies) in this article.

1. Prof. Sen never mentions the fact that poverty has fallen substantially in India in the period 1980-2010. The data clearly suggest that this is the case, and Amartya Sen (unlike conspiracy minded Indian left-wing economists) has never contradicted the data. This has a lot of relevance given the subject matter of the article.

2. Quoting Prof. Sen on India's recent development experience.....

"But there has also been a failure to ensure that rapid growth translates into better living conditions for the Indian people. It is not that they have not improved at all, but the pace of improvement has been very slow—even slower than in Bangladesh or Nepal. There is probably no other example in the history of world development of an economy growing so fast for so long with such limited results in terms of broad-based social progress".

This is FALSE and an attempt to trash India's record. The pace of improvement in Indian social indicators have been quite respectable by global standards - for example, many if not most Indian states (and possibly the entire country) is on track to meet some of the MDG goals on reducing child and maternal mortality and extreme poverty significantly from 1990 levels by 2015. On maternal mortality, a recent paper in LANCET finds that India is one of the few countries that have recorded a "substantial decline" in the maternal mortality rate in 1990-2008 - during this time period the rate at which maternal mortality fell in India was double the global average. (and anecdotal evidence suggests that it is falling equally fast and possibly faster now). Even if MDG goals are not met in some areas (like child mortality), progress has been substantial. If these goals are met in many areas (as is likely), that is an impressive achievement, given that the MDG goals were fairly ambitious to begin with. If Nepal and Bangladesh have made somewhat faster progress in improving some of their social indicators in the last 20 years, that is very good news. (Bangladesh is known to be a pretty strong performer in social development and India can certainly learn something from that) - but that doesn't mean India is doing poorly. Prof. Sen's comment that no other country in "the history of world development" did as poorly as India in translating fast economic growth into broad based social progress is irresponsible hyperbole which has more in common with left-wing pamphleteering than economic or social analysis. We should also remember that India made significant progress in empowering the lower castes and reducing gender disparity in the last 20 years (see the relevant political science literature on this) - progress of a kind that didn't happen in the first several decades after Independence. Economic liberalization and fast economic growth may have unleashed a certain kind of dynamism in Indian society and hitherto marginalized social groups have been able to reap the benefits (to some extent). This also comes out in sophisticated general books on India, like V.S Naipaul's "India, a million mutinies now". Therefore, in the last 20 years, social inequality (distance between upper and lower castes and between men and women) have fallen even though economic inequality may have increased.

Of course, it is true that India's record on social and human development is quite dismal - if we are looking at the absolute levels of the relevant variables instead of the rate of change in recent decades, but that is not due to the influence of "corporate power" or any shadowy corporate lobbies walking the corridors of power in Delhi advocating anti-poor policies (!) or anything of the kind. (This is where Prof. Sen's or his colleague's ideology is leading them ashtray). So what explains India's poor performance in human development? (and India had extremely poor human development indicators already by 1980, so it is not a recent problem at all, but the relatively fast improvement in recent years is encouraging). There are two more explanations in the literature

a) Societies with higher ethno-linguistic heterogeneity and social divisions have worse public policies and invest less in what economists call "public goods" - which includes things like public education and public health infrastructure (we are not going to go into the reasons for this now) - there is a lot of support for this hypothesis both in economic theory and real world data if you look at the literature.

b) The Government of India spends enormous sums of money on things that it calls "social welfare" but which are actually different kinds of hand outs to relatively privileged social groups (in a poor, unequal and ethnically heterogeneous society that is also a democracy, the political system will generate enormous pressure for this kind of spending) - unless we reform our subsidy regime and significantly reduce unproductive public expenditures intended to appease different interest groups, we would never have the kind of money that is needed to build a world class public education or public health care system. (that is so badly needed in India for reasons of both equity and growth).

3. In a democracy, there are different interest groups that are trying to influence policy in their own favour sometimes at the cost of public interest. Of all these interest groups, Prof. Sen picks one - the "corporate sector" for censure. In effect, this amounts to pandering to the Indian Left (which already has a disproportionate presence in public discourse in this country) and their prejudices against entrepreneurs. It panders to a belief that the corporate sector is engaged in some shadowy conspiracy along with politicians and officials to undermine India and we have to be on the look out for that. I think that is quite unkind and uncharitable to the most dynamic and innovative sector of the Indian society and economy - in spite of all the red tape and corruption and lousy infrastructure, Indian entrepreneurs do a brilliant job and they have made sure that India has moved from being a basket case in 1990 to a widely respected global economic power today. They have also created millions of job and pulled tens of millions into the middle class. What about the distortions in policy due to the influence and lobbying power of big farmers or trade unions or lawyers or bureaucrats or different caste associations? Without supporting "crony capitalism" - which involves an individual corporate cosying up to a (possibly corrupt) individual politician to obtain illegal favours, can we be a bit more generous to Indian entrepreneurs? I mean they are not "enemies of the people" who are trying to game the system against the poor or ARE THEY?! 

 It would be nice if this magazine also published an Essay by Jagdish Bhagwati or Arvind Panagariya on India's economic performance and then we can have a REAL debate, right? But I know they are not going to do that!

I know I'll be called a Nazi for an anti reservation post, but that is THE TRUTH.

The reservation based Indian Babus ranks last in South Asia.

Ohhh, we're supposed to get the blame for this as well, lefties??

The culprit here is social engineering in India, Bangladesh has little to worry about appeasing Muslims and underprivileged Hindus.

Our leaders are elected on the basis of who'll better serve his/her community, not on the basis of competence, unlike Bangladesh,China or present-day-first world countries like South Korea.

These countries don't reserve jobs in bureaucracy, Government jobs, teachers, and most Govt posts for anybody.

They simply hire the best, we can't.

This is why anything related to Government is of substandard quality.

A large minority with a persecution complex ensures the election of incomepetent left wing leaders like Digvijay Singh and Laloo Prasad Yadav.

India needs a meritocratic center Right party, not the left wing idiots who've run the country into a stinking sewer.

That, Mr Sen, is the truth.

The concept of caste has NOT been eliminated, like Babasaheb Ambedkar wanted.

The idea of Indians standing united is a joke in poor taste, how many of us are aware that, NOT ALL communities supported the 'Quit India' movement?

The same is true for regions as well, the Telangana agitation being one example.

@Banerjee,

The last thing we want is a lecture from lefties on HDIs, how do states like Bengal and Bihar, states ruled by left wingers, fare on the Index?

Post # 10:

 "Amartya sen is much over rated. Being a professor in Harvard is not much because hs basic degree is from lowly Presidency college. If some one from St stephen or presidency or JNU then you should automatically conclude he is of low IQ and unnecessarily hyped. Further Sen is from Kolkata and that is automatically points to pro poor propaganda amounting to nil solid work" -

Mind boggles at the outburst of such "confident" opinions which have been adequately tackled in the forums earlier.

Here is the link:

www.outlookindia.com/article.aspx

Ramkrishnan

The quality of your posts as always has been pathetic . You do not have the patience to read nor the brains to assimilate what author of any article communicates.
...
A brainless idiot like you obviously cannot go beyond the limitations of own thoughts and intellect.

Next time read any article and understand before jumping in and bleating your moronic ideas.

DC
NEW YORK, UNITED STATES

Over to you forum members !

The state is progressively withdrawing it support from petty production

The reason is not far to seek. The fundamentalism of GDP growth is worse than religious fundamenlism. Contribution of varoius growth sectors will be a pointer. Contribution of Service Sector to GDP is 58% , that of Industry is 28% & Agricuture contributes 16%. So if GDP is the only vector to assess development, incentive to service sector & indusrty is the quick-fix. That is what is being done.

By & large , modern industrial growth is jobless except for the trueblue . Only service sector provides real employment. But it is 100% domain of the   urban middle class who can afford modern education to fit in.

If one accept that increasing the living standards of majority of the population is real growth / development, then it translates in to expanding the consumer base to the maximum extent possible. Small & middle level farming community who constitutes 70% of the population are potentially the largest consumer group. So development & material welfare of the farm sector can only lead to sustainable growth as middle class consumption will saturate & therefore stagnate. So making GDP the birds eye is ultimately self defeatting in the long run. The slow & grinding route of agriculture' s contribution to GDP from 16% to at least to the level of industry is the way to sustainable growth. It also makes commercial sense as in the coming decades food shortage is the greatest challange & with increasing awareness about enviornment , organic industry is the idustry of the future.

Lest the GDP-wallas come rushing like mad bulls about dangers of deficit finance , let it be clear that subsidy & doles like NREGS etc. are not the only way the increase contribution of agricuture to development & growth. It will not be out of place to mention that in the US where these neo-libs learnt their economic mumbo-jumbo, agriculture is the highest subsidised indusrty.

It is indeed a pleasure to read this essay in a popular general magazine ‘Outlook’. Without going into the controversy of the development under ‘License Raj ‘and ‘Globalization era’, it is a hard fact that ‘trickle down effect’ cold not touch the life of majority of population.Inspite of highest productivity (evidenced from the record food grain production) the real income of the farmers is reduced by more than 15% in the twelve year period (1993-2005), the share of labour in organized manufacturing sector decreased from 0.6 to 0.26 between the period 1980 to 2007,during the same period real profit rate is increased from 25% to 45%.As per NSS data the employment growth rate is slowed to 0.1% per annum between 2004-05 to 2007-08 (lowest in 40 years) despite the best G.D.P growth of 9.4% per annum in real terms.
In agriculture credit the share of direct advances with credit limits above Rs 10 crores doubled between 2000 and 2006 while the share of advances with a credit limit of Rs 25000 in total advances fell from 35.2% to 13.3% during the same period. The state is progressively withdrawing it support from petty production and welfare activities. Most of the public utilities education, health, transport and housing are transferred to private sector. In the name of inclusive development, Government distributed some amount in cash or kind to the identified population (that too marred with corruption) without considering the development perspective. For villages where still 70% population live we do not have any master plan or infrastructure targets leave aside the implementation.
It is fact that the policies pursued by the Government strengthened the diametric division of the society
 

@ Prashant >> Almost always the best articles about India appears in an NewYork Times, Economist of Wallstreet Journal(with novel indepth analysis and never heard before stories) never in Times of India, Outlook or even Hindu. Why is that?
This is because the best journalists are busy with page 3 kind of articles. Take for example, Vinod Mehta writing Delhi Dairy instead of doing a cover story atleast once in a quarter...

I just wanted to add another point to my (rather longish!) earlier comment. Quoting Prof. Sen...

"But there has also been a failure to ensure that rapid growth translates into better living conditions for the Indian people. It is not that they have not improved at all, but the pace of improvement has been very slow—even slower than in Bangladesh or Nepal. There is probably no other example in the history of world development of an economy growing so fast for so long with such limited results in terms of broad-based social progress".

This is FALSE and an attempt to trash India's record. The pace of improvement in India have been quite rapid by global standards, for example, many if not most Indian states (and possibly the entire country) is on track to meet the MDG goal of reducing child mortality and maternal mortality by 75% from 1990 levels by 2015. India is also on track to meet the MDG goal on poverty reduction by 2015. If these goals are met, that is an impressive achievement, given that the MDG goals were fairly ambitious to begin with. (Not many people in the international organizations expected that the goals will actually be met). If Nepal and Bangladesh have made somewhat faster progress in improving their social indicators in the last 20 years, that is very good news. (and we can certainly learn something from that) - but that doesn't mean India is doing poorly. Prof. Sen's comment that no other country in the "history of world development" did as poorly as India in translating fast economic growth into broad based social progress is irresponsible hyperbole which has more in common with left-wing pamphleteering than economic or social analysis. We should also remember that India made significant progress in empowering the lower castes and reducing gender disparity in the last 20 years (see the relevant political science literature on this) - progress of a kind that didn't happen in the first several decades after Independence. Economic liberalization and fast economic growth may have unleashed a certain kind of dynamism in Indian society and hitherto marginalized social groups have been able to reap the benefits (to some extent). Therefore, in the last 20 years social inequality has fallen (distance between upper and lower castes and between men and women) even though economic inequality may have increased.

Of course, it is true that India's record in social and human development is quite unimpressive - but that is not due to the influence of "corporate power" or any shadowy corporate lobbies or anything of the kind. (This is where Prof. Sen's ideology is leading him ashtray). The government of India spends enormous sums of money on things that it calls "social welfare" but which are actually different kinds of hand outs to relatively privileged social groups - unless we reform our subsidy regime and significantly reduce unproductive public expenditures intended to appease different interest groups - we would never have the kind of money that is needed to build a world class public education or public health care system. (that is so badly needed for both growth and equity).
 

"Unaimed opulence" would lead to further income disparities. Economic growth has to be entwined with enlightened social policy.

Mitra,
You come with same economics jargon about subsidies. Where are real subsidies. An administrative price doesnt automatically becomes subsidy as claimed by oil companies. There is always net tax on Oil. Government is paying huge subsidy of 20000 crores under JN Mission benefitting not poor but big manufacturing companies and rich people who can very well afford equipment. The poor any way cant afford the equipment. Government wastes 70000 crores on games out of which 50000 crores are siphoned off. Government buys 50000 crore Aircraft for sinking Air India. 

No comments on poor infrastructure, Mr Sen?

(I teach economics in an university) Prof. Amartya Sen is obviously a great economist - but there are a number of statements in this article that are derived from his political views and NOT from his economic expertise. That shouldn't be a problem - all of us have political views, so does Amartya Sen. But Amartya Sen's political views are no more valid than mine because he is a great economist - what I mean is that his (undoubtedly great) expertise in economics should not confer any additional legitimacy on his political views. In America, there are 50 Nobel prize winners in Economics - some of them have relatively left wing views, others are tilted to the right. So there is always a good debate between them which helps in clarifying issues for us common folk. The problem in India is that we have only one Nobel winning economist, and he has a left-oriented political worldview which we accept without critical analysis. (By left, I don't mean the crazy Indian left, but Cambridge left). Lets discuss a few flaws and major ideological biases in this article.

1. Prof. Sen's never mentions or highlights the fact that poverty has fallen substantially in India in the period 1980-2010. The data clearly suggest that this is the case, and Amartya Sen (unlike conspiracy minded Indian left-wing economists) has never contradicted the data. This has a lot of relevance given the subject matter of the article.

2. In a democracy, there are different interest groups that try to influence policy in their own favour sometimes at the cost of public interest. Of all these interest groups, Prof. Sen picks one - the "corporate sector" for censure. (not quite perhaps, but he hints in that direction). In effect, this amounts to pandering to the Indian Left (which already has a disproportionate presence in public discourse in this country) and their prejudices against entrepreneurs. It panders to a belief that the corporate sector is engaged in some shadowy conspiracy along with politicians and officials to undermine India and we have to be on the look out for that. I think that is quite unkind and uncharitable to the most dynamic and innovative sector of the Indian society/economy - in spite of all the red tape and corruption and bad infrastructure, Indian entrepreneurs do a brilliant job and they have made sure that India has moved from being a basket case in 1990 to a widely respected global economic power today. They have also created millions of job and pulled tens of millions into the middle class. What about the distortions in policy due to the influence and lobbying power of big farmers or trade unions or lawyers or bureaucrats?

3. I agree with Prof. Sen that India has spent too little on basic public education and public health and a lot more needs to be done in this regard and some of our neighbours like Bangladesh has done better. But there are two points that needed to be highlighted which Prof. Sen doesn't highlight.

a) India had severe deficiencies in these areas already by 1980 - after that we have reversed course - in health we are trying increase expenditures only recently. All of the backlog that has been there for a long time cannot be corrected in 20 years 1990-2010. Nevertheless, India's infant mortality rate, maternal mortality rate and other health and education related indicators have improved very substantially in the last 25 years. But as Prof. Sen correctly observes, they are still pretty poor. (though it is encouraging that they are improving fast now).

b) India spends so much handing out unproductive subsidies to different interest groups - fuel subsidy, fertilizer subsidy, electricity subsidy (look at the rates of power theft from state run power distribution companies), food subsidy that very little money remains for development. Prof. Sen is quite right that India should spend a lot more on basic education and health care - however this cannot happen as long as we spend an absurdly large fraction of our tax revenues on appeasing different interest groups with subsidies - so Prof. Sen's analysis must confront the political economy of government expenditure/subsidy regime in India.

Overall, this is a very interesting article. (though all the points made here are rather obvious and will be known to any development economist). But this article is not entirely free from Prof. Sen's ideological biases and his left wing political worldview. However, I agree with his basic idea that the government needs to do more to improve India's public education and public health care infrastrcture - that would help both equity and growth in the future.

p.s: Will Outlook invite Prof Jagdish Bhagwati, another great economist to contribute an article? Prof. Bhagwati's views are skewed to the right (opposite of Amartya Sen) and he may present a slightly different perspective.
 

The data is simply fabricated. If bangladesh is doing so well than why bangladeshis are entering india and Bangladeshi children rummaging the waste for food.

Amartya sen is much over rated. Being a professor in Harvard is not much because hs basic degree is from lowly Presidency college. If some one from St stephen or presidency or JNU then you should automatically conclude he is of low IQ and unnecessarily hyped. Further Sen is from Kolkata and that is automatically points to pro poor propaganda amounting to nil solid work. Havent we seen how infants are dying in kolkata hospital every day.

All the data used by sen and dreaze is questionable. For years Indians but more prominently bongs were throwing the figure of Rs 20/day till Rs 32 is used by planning commission. this year. This Rs 20/day was sengupta report figure used in 1995 when the minimum wage was Rs. 11/day/person. The statistics available in india comes from same government muck which doesnt care to do any work. The GDP figures are off by 40 percent. real GDP of India is much higher than calculated by government. So many poor in India but no one to work for MNREGA.

All the poor are concentrated in east where people are simply uninterested in working hard. Kolkata should have become engine of growth but every day there is a strike. Can you forget how TATA were hounded out. now same bongs go and work in these automoble plants eulogising class war. The misgovernance in Bihar, eastern UP and Jharkhand is forcing people to migrate to other places in serach of work. Lalu ran so many new trains to mumbai and bangalore and pune spreading bihari culture to good places. In further east people are busy in their petty tribal rivalies and no one cares for working to feed their children. The tribals have their own problems with different life style and inability to change.


But the most important problem is governance. Corruption is only incentive to come in power. Be it coal mines or KG basin gas or Iron mines or Diamond mines, every politicians cut private deals. Corruption is most important cause which stops flow of money to poor area. But the same leftist then protect congress when Anna tries to get strong law. The core of indian politicians are only interested in money. Thats why construction of roads which could have generated jobs was parcelled out to big companies which used jobless technology . Today government blatantly used tender condition so that competent but small companies are rejected and financially big companies are benefitted. Award of Metro to reliance is a point. Similarly award of UMPP was done to bigger group and not experienced group. In fact 250 MW plants could have been placed to medium sized well managed companies than big groups. So adani gets port. Reliance, TATA, Birla get telecom too. These people get bank loans and practically without investing a single rupee of own become big. What about Refineries or toll roads. 

The policy to push business towards smaller size has long been reversed. Earlier companies were allowed to issue shares at rates which benefitted middle class. now share prices are kept high to cheat customers. Companies like Procter and Gillette are taking money out as royalty and deptt of company affair or SEBI are not taking any action. in earlier times middle class were benefitted by rules and capital formation took place . Similarly company going to backward area should pay less tax than company in prosperous area. The money must be pushed towards smaller business by applying differential taxation.

Prasanth
 

Why is it that it takes an Amrtya Sen or a Jean Drezee from foreign universities to write such a world class analysis about India's development?.
 
Perhaps you missed the affiliation of Dreze mentined below the article. His name may have misled you but he is a well respected Indian economist who did his PhD at ISI Delhi and spent his career at the Delhi School of Economics. In these respects he is probably more Indian than Sen (who by the way continues to hold an Indian passport).

The report card clearly tells us that all the hype about India being the success story of the 21st century is just hot air. Even by South Asian standards, we are performing poorly. The fault is not with our democracy but with our politicians who have subverted it and converted it into a kleptocracy, thereby depriving the poorest of the poor of their slice of the national cake.

It is our political class, the bureaucracy and the wealthy who are responsible for this sordid state of affairs. Thank you Outlook for making this essay your cover story.

@ashoklal

It would be interesting to analyse how the four fold increase in public revenues in two decades has translated into greater national welfare, either generally or for the poor.

that is a very good question. In large parts of the country public spending is just an open and highly organised  lootfest.  There is some about the polity in many states that encourages this.  It is feudalism, castesim, tribalism, or all of the above. Some states are of course better run and thats not surprising in a large country. The fundamental problem is corruption> we don't need development experts to tell us this.

Thats whats missing in this analysis - any cultural insight. Why is Kerala doing better than West Bengal when both are dominated by CPIM type politics?

Prasanth

Almost always the best articles about India appears in an NewYork Times, Economist of Wallstreet Journal(with novel indepth analysis and never heard before stories)  never in Times of India, Outlook or even Hindu.

I don't know if this is true. There maybe some circular reasoning here

Amartya Sen & Jean Dreze has busted the the so called growth story in an lucid analysis backed by data right from the place where the growth merchants learned thier false growth story. Rare in Indian mainstream media. Thank you Sen & Jean.  Thank you Outlook.

Read between the lines , folks. Growth & development are not the same thing. Trickle down of wealth is devious misrepresntation of development paradigm. Not for nothing they equated growth with develomment. It is a design to use the apparatus of the state & its wealth for development of those who are already developed. Those 16 %,  of whom only 2% control 90% of the wealth.

In this lopsided growth model wealth do not trickle down . Sen & Dreze has rightly drwan reference to Latin America. The growth & trickle down story was sold to them by the same set of people whose genre now are calling the economic shots in this country. It did not work in Latin America . That is a well known empirical fact & Latin American are now in the process of  rewriting their own inclusive growth story which is bottoms-up instead of tops-down. So what is being  knowingly sold to Indians is discareded , discredited growth story. That it did not work in India eiither after a decade is now coming out in the open.

 Why is it that it takes an Amrtya Sen or a Jean Drezee from foreign universities to write such a world class analysis about India's development?  Sure, we have good journalists and development expets . But their writings somehow lacks the depth of this article (for example comparing development models in different countries with empirical evidence).-P Sainath of Hindu might be an exception. Almost always the best articles about India appears in an NewYork Times, Economist of Wallstreet Journal(with novel indepth analysis and never heard before stories)  never in Times of India, Outlook or even Hindu. Why is that? Why is that it always takes a foreigner to "understand" and tell US about India's problems? It always  surprises me.....  

A fantastic analysis, hope our "politicians" are reading it 

It would be interesting to analyse how the four fold increase in public revenues in two decades has translated into greater national welfare, either generally or for the poor.

At India's level of per capita income, never mind the inequalities that exist and may even have widened, not necessarily because the poor are getting poorer, nothing less than thirty years of high economic growth can end the scourge of widespread poverty. Vodoo economics married to populist politics might unravel the India growth story.

Apropos the above report, I would only like to dedicate two lines to PM and FM:-

"Desh Ko Azaad Hum Bhi Maan Lein,

Gar Hamaare Gaon Kaa Harkhoo Kahey."

Apropos the above report, I would only like to dedicate two lines to PM and FM:-

"Desh Ko Azaad Hum Bhi Maan Lein,

Gar Hamaare Gaon Kaa Harkhoo Kahey."

At India's level of per capita income, never mind the inequalities that exist and may even have widened, not necessarily because the poor are getting poorer, nothing less than thirty years of high economic growth can end the scourge of widespread poverty. Vodoo economics married to populist politics might unravel the India growth story.

It would be interesting to analyse how the four fold increase in public revenues in two decades has translated into greater national welfare, either generally or for the poor.

 Why is it that it takes an Amrtya Sen or a Jean Drezee from foreign universities to write such a world class analysis about India's development?  Sure, we have good journalists and development expets . But their writings somehow lacks the depth of this article (for example comparing development models in different countries with empirical evidence).-P Sainath of Hindu might be an exception. Almost always the best articles about India appears in an NewYork Times, Economist of Wallstreet Journal(with novel indepth analysis and never heard before stories)  never in Times of India, Outlook or even Hindu. Why is that? Why is that it always takes a foreigner to "understand" and tell US about India's problems? It always  surprises me.....  

A fantastic analysis, hope our "politicians" are reading it 

Amartya Sen & Jean Dreze has busted the the so called growth story in an lucid analysis backed by data right from the place where the growth merchants learned thier false growth story. Rare in Indian mainstream media. Thank you Sen & Jean.  Thank you Outlook.

Read between the lines , folks. Growth & development are not the same thing. Trickle down of wealth is devious misrepresntation of development paradigm. Not for nothing they equated growth with develomment. It is a design to use the apparatus of the state & its wealth for development of those who are already developed. Those 16 %,  of whom only 2% control 90% of the wealth.

In this lopsided growth model wealth do not trickle down . Sen & Dreze has rightly drwan reference to Latin America. The growth & trickle down story was sold to them by the same set of people whose genre now are calling the economic shots in this country. It did not work in Latin America . That is a well known empirical fact & Latin American are now in the process of  rewriting their own inclusive growth story which is bottoms-up instead of tops-down. So what is being  knowingly sold to Indians is discareded , discredited growth story. That it did not work in India eiither after a decade is now coming out in the open.

Prasanth

Almost always the best articles about India appears in an NewYork Times, Economist of Wallstreet Journal(with novel indepth analysis and never heard before stories)  never in Times of India, Outlook or even Hindu.

I don't know if this is true. There maybe some circular reasoning here

@ashoklal

It would be interesting to analyse how the four fold increase in public revenues in two decades has translated into greater national welfare, either generally or for the poor.

that is a very good question. In large parts of the country public spending is just an open and highly organised  lootfest.  There is some about the polity in many states that encourages this.  It is feudalism, castesim, tribalism, or all of the above. Some states are of course better run and thats not surprising in a large country. The fundamental problem is corruption> we don't need development experts to tell us this.

Thats whats missing in this analysis - any cultural insight. Why is Kerala doing better than West Bengal when both are dominated by CPIM type politics?

The report card clearly tells us that all the hype about India being the success story of the 21st century is just hot air. Even by South Asian standards, we are performing poorly. The fault is not with our democracy but with our politicians who have subverted it and converted it into a kleptocracy, thereby depriving the poorest of the poor of their slice of the national cake.

It is our political class, the bureaucracy and the wealthy who are responsible for this sordid state of affairs. Thank you Outlook for making this essay your cover story.

Prasanth
 

Why is it that it takes an Amrtya Sen or a Jean Drezee from foreign universities to write such a world class analysis about India's development?.
 
Perhaps you missed the affiliation of Dreze mentined below the article. His name may have misled you but he is a well respected Indian economist who did his PhD at ISI Delhi and spent his career at the Delhi School of Economics. In these respects he is probably more Indian than Sen (who by the way continues to hold an Indian passport).

Amartya sen is much over rated. Being a professor in Harvard is not much because hs basic degree is from lowly Presidency college. If some one from St stephen or presidency or JNU then you should automatically conclude he is of low IQ and unnecessarily hyped. Further Sen is from Kolkata and that is automatically points to pro poor propaganda amounting to nil solid work. Havent we seen how infants are dying in kolkata hospital every day.

All the data used by sen and dreaze is questionable. For years Indians but more prominently bongs were throwing the figure of Rs 20/day till Rs 32 is used by planning commission. this year. This Rs 20/day was sengupta report figure used in 1995 when the minimum wage was Rs. 11/day/person. The statistics available in india comes from same government muck which doesnt care to do any work. The GDP figures are off by 40 percent. real GDP of India is much higher than calculated by government. So many poor in India but no one to work for MNREGA.

All the poor are concentrated in east where people are simply uninterested in working hard. Kolkata should have become engine of growth but every day there is a strike. Can you forget how TATA were hounded out. now same bongs go and work in these automoble plants eulogising class war. The misgovernance in Bihar, eastern UP and Jharkhand is forcing people to migrate to other places in serach of work. Lalu ran so many new trains to mumbai and bangalore and pune spreading bihari culture to good places. In further east people are busy in their petty tribal rivalies and no one cares for working to feed their children. The tribals have their own problems with different life style and inability to change.


But the most important problem is governance. Corruption is only incentive to come in power. Be it coal mines or KG basin gas or Iron mines or Diamond mines, every politicians cut private deals. Corruption is most important cause which stops flow of money to poor area. But the same leftist then protect congress when Anna tries to get strong law. The core of indian politicians are only interested in money. Thats why construction of roads which could have generated jobs was parcelled out to big companies which used jobless technology . Today government blatantly used tender condition so that competent but small companies are rejected and financially big companies are benefitted. Award of Metro to reliance is a point. Similarly award of UMPP was done to bigger group and not experienced group. In fact 250 MW plants could have been placed to medium sized well managed companies than big groups. So adani gets port. Reliance, TATA, Birla get telecom too. These people get bank loans and practically without investing a single rupee of own become big. What about Refineries or toll roads. 

The policy to push business towards smaller size has long been reversed. Earlier companies were allowed to issue shares at rates which benefitted middle class. now share prices are kept high to cheat customers. Companies like Procter and Gillette are taking money out as royalty and deptt of company affair or SEBI are not taking any action. in earlier times middle class were benefitted by rules and capital formation took place . Similarly company going to backward area should pay less tax than company in prosperous area. The money must be pushed towards smaller business by applying differential taxation.

The data is simply fabricated. If bangladesh is doing so well than why bangladeshis are entering india and Bangladeshi children rummaging the waste for food.

(I teach economics in an university) Prof. Amartya Sen is obviously a great economist - but there are a number of statements in this article that are derived from his political views and NOT from his economic expertise. That shouldn't be a problem - all of us have political views, so does Amartya Sen. But Amartya Sen's political views are no more valid than mine because he is a great economist - what I mean is that his (undoubtedly great) expertise in economics should not confer any additional legitimacy on his political views. In America, there are 50 Nobel prize winners in Economics - some of them have relatively left wing views, others are tilted to the right. So there is always a good debate between them which helps in clarifying issues for us common folk. The problem in India is that we have only one Nobel winning economist, and he has a left-oriented political worldview which we accept without critical analysis. (By left, I don't mean the crazy Indian left, but Cambridge left). Lets discuss a few flaws and major ideological biases in this article.

1. Prof. Sen's never mentions or highlights the fact that poverty has fallen substantially in India in the period 1980-2010. The data clearly suggest that this is the case, and Amartya Sen (unlike conspiracy minded Indian left-wing economists) has never contradicted the data. This has a lot of relevance given the subject matter of the article.

2. In a democracy, there are different interest groups that try to influence policy in their own favour sometimes at the cost of public interest. Of all these interest groups, Prof. Sen picks one - the "corporate sector" for censure. (not quite perhaps, but he hints in that direction). In effect, this amounts to pandering to the Indian Left (which already has a disproportionate presence in public discourse in this country) and their prejudices against entrepreneurs. It panders to a belief that the corporate sector is engaged in some shadowy conspiracy along with politicians and officials to undermine India and we have to be on the look out for that. I think that is quite unkind and uncharitable to the most dynamic and innovative sector of the Indian society/economy - in spite of all the red tape and corruption and bad infrastructure, Indian entrepreneurs do a brilliant job and they have made sure that India has moved from being a basket case in 1990 to a widely respected global economic power today. They have also created millions of job and pulled tens of millions into the middle class. What about the distortions in policy due to the influence and lobbying power of big farmers or trade unions or lawyers or bureaucrats?

3. I agree with Prof. Sen that India has spent too little on basic public education and public health and a lot more needs to be done in this regard and some of our neighbours like Bangladesh has done better. But there are two points that needed to be highlighted which Prof. Sen doesn't highlight.

a) India had severe deficiencies in these areas already by 1980 - after that we have reversed course - in health we are trying increase expenditures only recently. All of the backlog that has been there for a long time cannot be corrected in 20 years 1990-2010. Nevertheless, India's infant mortality rate, maternal mortality rate and other health and education related indicators have improved very substantially in the last 25 years. But as Prof. Sen correctly observes, they are still pretty poor. (though it is encouraging that they are improving fast now).

b) India spends so much handing out unproductive subsidies to different interest groups - fuel subsidy, fertilizer subsidy, electricity subsidy (look at the rates of power theft from state run power distribution companies), food subsidy that very little money remains for development. Prof. Sen is quite right that India should spend a lot more on basic education and health care - however this cannot happen as long as we spend an absurdly large fraction of our tax revenues on appeasing different interest groups with subsidies - so Prof. Sen's analysis must confront the political economy of government expenditure/subsidy regime in India.

Overall, this is a very interesting article. (though all the points made here are rather obvious and will be known to any development economist). But this article is not entirely free from Prof. Sen's ideological biases and his left wing political worldview. However, I agree with his basic idea that the government needs to do more to improve India's public education and public health care infrastrcture - that would help both equity and growth in the future.

p.s: Will Outlook invite Prof Jagdish Bhagwati, another great economist to contribute an article? Prof. Bhagwati's views are skewed to the right (opposite of Amartya Sen) and he may present a slightly different perspective.
 

No comments on poor infrastructure, Mr Sen?

Mitra,
You come with same economics jargon about subsidies. Where are real subsidies. An administrative price doesnt automatically becomes subsidy as claimed by oil companies. There is always net tax on Oil. Government is paying huge subsidy of 20000 crores under JN Mission benefitting not poor but big manufacturing companies and rich people who can very well afford equipment. The poor any way cant afford the equipment. Government wastes 70000 crores on games out of which 50000 crores are siphoned off. Government buys 50000 crore Aircraft for sinking Air India. 

"Unaimed opulence" would lead to further income disparities. Economic growth has to be entwined with enlightened social policy.

I just wanted to add another point to my (rather longish!) earlier comment. Quoting Prof. Sen...

"But there has also been a failure to ensure that rapid growth translates into better living conditions for the Indian people. It is not that they have not improved at all, but the pace of improvement has been very slow—even slower than in Bangladesh or Nepal. There is probably no other example in the history of world development of an economy growing so fast for so long with such limited results in terms of broad-based social progress".

This is FALSE and an attempt to trash India's record. The pace of improvement in India have been quite rapid by global standards, for example, many if not most Indian states (and possibly the entire country) is on track to meet the MDG goal of reducing child mortality and maternal mortality by 75% from 1990 levels by 2015. India is also on track to meet the MDG goal on poverty reduction by 2015. If these goals are met, that is an impressive achievement, given that the MDG goals were fairly ambitious to begin with. (Not many people in the international organizations expected that the goals will actually be met). If Nepal and Bangladesh have made somewhat faster progress in improving their social indicators in the last 20 years, that is very good news. (and we can certainly learn something from that) - but that doesn't mean India is doing poorly. Prof. Sen's comment that no other country in the "history of world development" did as poorly as India in translating fast economic growth into broad based social progress is irresponsible hyperbole which has more in common with left-wing pamphleteering than economic or social analysis. We should also remember that India made significant progress in empowering the lower castes and reducing gender disparity in the last 20 years (see the relevant political science literature on this) - progress of a kind that didn't happen in the first several decades after Independence. Economic liberalization and fast economic growth may have unleashed a certain kind of dynamism in Indian society and hitherto marginalized social groups have been able to reap the benefits (to some extent). Therefore, in the last 20 years social inequality has fallen (distance between upper and lower castes and between men and women) even though economic inequality may have increased.

Of course, it is true that India's record in social and human development is quite unimpressive - but that is not due to the influence of "corporate power" or any shadowy corporate lobbies or anything of the kind. (This is where Prof. Sen's ideology is leading him ashtray). The government of India spends enormous sums of money on things that it calls "social welfare" but which are actually different kinds of hand outs to relatively privileged social groups - unless we reform our subsidy regime and significantly reduce unproductive public expenditures intended to appease different interest groups - we would never have the kind of money that is needed to build a world class public education or public health care system. (that is so badly needed for both growth and equity).
 

@ Prashant >> Almost always the best articles about India appears in an NewYork Times, Economist of Wallstreet Journal(with novel indepth analysis and never heard before stories) never in Times of India, Outlook or even Hindu. Why is that?
This is because the best journalists are busy with page 3 kind of articles. Take for example, Vinod Mehta writing Delhi Dairy instead of doing a cover story atleast once in a quarter...

It is indeed a pleasure to read this essay in a popular general magazine ‘Outlook’. Without going into the controversy of the development under ‘License Raj ‘and ‘Globalization era’, it is a hard fact that ‘trickle down effect’ cold not touch the life of majority of population.Inspite of highest productivity (evidenced from the record food grain production) the real income of the farmers is reduced by more than 15% in the twelve year period (1993-2005), the share of labour in organized manufacturing sector decreased from 0.6 to 0.26 between the period 1980 to 2007,during the same period real profit rate is increased from 25% to 45%.As per NSS data the employment growth rate is slowed to 0.1% per annum between 2004-05 to 2007-08 (lowest in 40 years) despite the best G.D.P growth of 9.4% per annum in real terms.
In agriculture credit the share of direct advances with credit limits above Rs 10 crores doubled between 2000 and 2006 while the share of advances with a credit limit of Rs 25000 in total advances fell from 35.2% to 13.3% during the same period. The state is progressively withdrawing it support from petty production and welfare activities. Most of the public utilities education, health, transport and housing are transferred to private sector. In the name of inclusive development, Government distributed some amount in cash or kind to the identified population (that too marred with corruption) without considering the development perspective. For villages where still 70% population live we do not have any master plan or infrastructure targets leave aside the implementation.
It is fact that the policies pursued by the Government strengthened the diametric division of the society
 

The state is progressively withdrawing it support from petty production

The reason is not far to seek. The fundamentalism of GDP growth is worse than religious fundamenlism. Contribution of varoius growth sectors will be a pointer. Contribution of Service Sector to GDP is 58% , that of Industry is 28% & Agricuture contributes 16%. So if GDP is the only vector to assess development, incentive to service sector & indusrty is the quick-fix. That is what is being done.

By & large , modern industrial growth is jobless except for the trueblue . Only service sector provides real employment. But it is 100% domain of the   urban middle class who can afford modern education to fit in.

If one accept that increasing the living standards of majority of the population is real growth / development, then it translates in to expanding the consumer base to the maximum extent possible. Small & middle level farming community who constitutes 70% of the population are potentially the largest consumer group. So development & material welfare of the farm sector can only lead to sustainable growth as middle class consumption will saturate & therefore stagnate. So making GDP the birds eye is ultimately self defeatting in the long run. The slow & grinding route of agriculture' s contribution to GDP from 16% to at least to the level of industry is the way to sustainable growth. It also makes commercial sense as in the coming decades food shortage is the greatest challange & with increasing awareness about enviornment , organic industry is the idustry of the future.

Lest the GDP-wallas come rushing like mad bulls about dangers of deficit finance , let it be clear that subsidy & doles like NREGS etc. are not the only way the increase contribution of agricuture to development & growth. It will not be out of place to mention that in the US where these neo-libs learnt their economic mumbo-jumbo, agriculture is the highest subsidised indusrty.

Post # 10:

 "Amartya sen is much over rated. Being a professor in Harvard is not much because hs basic degree is from lowly Presidency college. If some one from St stephen or presidency or JNU then you should automatically conclude he is of low IQ and unnecessarily hyped. Further Sen is from Kolkata and that is automatically points to pro poor propaganda amounting to nil solid work" -

Mind boggles at the outburst of such "confident" opinions which have been adequately tackled in the forums earlier.

Here is the link:

www.outlookindia.com/article.aspx

Ramkrishnan

The quality of your posts as always has been pathetic . You do not have the patience to read nor the brains to assimilate what author of any article communicates.
...
A brainless idiot like you obviously cannot go beyond the limitations of own thoughts and intellect.

Next time read any article and understand before jumping in and bleating your moronic ideas.

DC
NEW YORK, UNITED STATES

Over to you forum members !

Ohhh, we're supposed to get the blame for this as well, lefties??

The culprit here is social engineering in India, Bangladesh has little to worry about appeasing Muslims and underprivileged Hindus.

Our leaders are elected on the basis of who'll better serve his/her community, not on the basis of competence, unlike Bangladesh,China or present-day-first world countries like South Korea.

These countries don't reserve jobs in bureaucracy, Government jobs, teachers, and most Govt posts for anybody.

They simply hire the best, we can't.

This is why anything related to Government is of substandard quality.

A large minority with a persecution complex ensures the election of incomepetent left wing leaders like Digvijay Singh and Laloo Prasad Yadav.

India needs a meritocratic center Right party, not the left wing idiots who've run the country into a stinking sewer.

That, Mr Sen, is the truth.

The concept of caste has NOT been eliminated, like Babasaheb Ambedkar wanted.

The idea of Indians standing united is a joke in poor taste, how many of us are aware that, NOT ALL communities supported the 'Quit India' movement?

The same is true for regions as well, the Telangana agitation being one example.

@Banerjee,

The last thing we want is a lecture from lefties on HDIs, how do states like Bengal and Bihar, states ruled by left wingers, fare on the Index?

I know I'll be called a Nazi for an anti reservation post, but that is THE TRUTH.

The reservation based Indian Babus ranks last in South Asia.

I am rewriting and combining my previous two comments.....

Prof. Amartya Sen is obviously a great economist - but there are a number of statements in this article that are based on his political positions and NOT on his economic expertise. That shouldn't be a problem - all of us have political views, so does Amartya Sen. But Amartya Sen's political views are no more valid than mine because he is a great economist - what I mean is that his (undoubtedly great) expertise in economics should not confer any additional legitimacy on his political views. In America, there are 50 Nobel prize winners in Economics - some of them have relatively left wing views, others are tilted to the right. So there is always a good debate between them which helps in clarifying issues for us common folks. The problem in India is that we have only one Nobel winning economist, and he has a left-oriented political worldview which we accept without critical analysis. (By left, I don't mean the crazy Indian left, but Cambridge left). Lets discuss a few flaws and ideological biases (and perhaps even factual inaccuracies) in this article.

1. Prof. Sen never mentions the fact that poverty has fallen substantially in India in the period 1980-2010. The data clearly suggest that this is the case, and Amartya Sen (unlike conspiracy minded Indian left-wing economists) has never contradicted the data. This has a lot of relevance given the subject matter of the article.

2. Quoting Prof. Sen on India's recent development experience.....

"But there has also been a failure to ensure that rapid growth translates into better living conditions for the Indian people. It is not that they have not improved at all, but the pace of improvement has been very slow—even slower than in Bangladesh or Nepal. There is probably no other example in the history of world development of an economy growing so fast for so long with such limited results in terms of broad-based social progress".

This is FALSE and an attempt to trash India's record. The pace of improvement in Indian social indicators have been quite respectable by global standards - for example, many if not most Indian states (and possibly the entire country) is on track to meet some of the MDG goals on reducing child and maternal mortality and extreme poverty significantly from 1990 levels by 2015. On maternal mortality, a recent paper in LANCET finds that India is one of the few countries that have recorded a "substantial decline" in the maternal mortality rate in 1990-2008 - during this time period the rate at which maternal mortality fell in India was double the global average. (and anecdotal evidence suggests that it is falling equally fast and possibly faster now). Even if MDG goals are not met in some areas (like child mortality), progress has been substantial. If these goals are met in many areas (as is likely), that is an impressive achievement, given that the MDG goals were fairly ambitious to begin with. If Nepal and Bangladesh have made somewhat faster progress in improving some of their social indicators in the last 20 years, that is very good news. (Bangladesh is known to be a pretty strong performer in social development and India can certainly learn something from that) - but that doesn't mean India is doing poorly. Prof. Sen's comment that no other country in "the history of world development" did as poorly as India in translating fast economic growth into broad based social progress is irresponsible hyperbole which has more in common with left-wing pamphleteering than economic or social analysis. We should also remember that India made significant progress in empowering the lower castes and reducing gender disparity in the last 20 years (see the relevant political science literature on this) - progress of a kind that didn't happen in the first several decades after Independence. Economic liberalization and fast economic growth may have unleashed a certain kind of dynamism in Indian society and hitherto marginalized social groups have been able to reap the benefits (to some extent). This also comes out in sophisticated general books on India, like V.S Naipaul's "India, a million mutinies now". Therefore, in the last 20 years, social inequality (distance between upper and lower castes and between men and women) have fallen even though economic inequality may have increased.

Of course, it is true that India's record on social and human development is quite dismal - if we are looking at the absolute levels of the relevant variables instead of the rate of change in recent decades, but that is not due to the influence of "corporate power" or any shadowy corporate lobbies walking the corridors of power in Delhi advocating anti-poor policies (!) or anything of the kind. (This is where Prof. Sen's or his colleague's ideology is leading them ashtray). So what explains India's poor performance in human development? (and India had extremely poor human development indicators already by 1980, so it is not a recent problem at all, but the relatively fast improvement in recent years is encouraging). There are two more explanations in the literature

a) Societies with higher ethno-linguistic heterogeneity and social divisions have worse public policies and invest less in what economists call "public goods" - which includes things like public education and public health infrastructure (we are not going to go into the reasons for this now) - there is a lot of support for this hypothesis both in economic theory and real world data if you look at the literature.

b) The Government of India spends enormous sums of money on things that it calls "social welfare" but which are actually different kinds of hand outs to relatively privileged social groups (in a poor, unequal and ethnically heterogeneous society that is also a democracy, the political system will generate enormous pressure for this kind of spending) - unless we reform our subsidy regime and significantly reduce unproductive public expenditures intended to appease different interest groups, we would never have the kind of money that is needed to build a world class public education or public health care system. (that is so badly needed in India for reasons of both equity and growth).

3. In a democracy, there are different interest groups that are trying to influence policy in their own favour sometimes at the cost of public interest. Of all these interest groups, Prof. Sen picks one - the "corporate sector" for censure. In effect, this amounts to pandering to the Indian Left (which already has a disproportionate presence in public discourse in this country) and their prejudices against entrepreneurs. It panders to a belief that the corporate sector is engaged in some shadowy conspiracy along with politicians and officials to undermine India and we have to be on the look out for that. I think that is quite unkind and uncharitable to the most dynamic and innovative sector of the Indian society and economy - in spite of all the red tape and corruption and lousy infrastructure, Indian entrepreneurs do a brilliant job and they have made sure that India has moved from being a basket case in 1990 to a widely respected global economic power today. They have also created millions of job and pulled tens of millions into the middle class. What about the distortions in policy due to the influence and lobbying power of big farmers or trade unions or lawyers or bureaucrats or different caste associations? Without supporting "crony capitalism" - which involves an individual corporate cosying up to a (possibly corrupt) individual politician to obtain illegal favours, can we be a bit more generous to Indian entrepreneurs? I mean they are not "enemies of the people" who are trying to game the system against the poor or ARE THEY?! 

 It would be nice if this magazine also published an Essay by Jagdish Bhagwati or Arvind Panagariya on India's economic performance and then we can have a REAL debate, right? But I know they are not going to do that!

@banerjee says

The reason is not far to seek. The fundamentalism of GDP growth is worse than religious fundamenlism.

is this meant to be a joke?

 Only service sector provides real employment. But it is 100% domain of the urban middle class who can afford modern education to fit in.

funny and not true

It will not be out of place to mention that in the US where these neo-libs learnt their economic mumbo-jumbo, agriculture is the highest subsidised indusrty.

agriculture in the USA only requires 1-2 percent of the working population. Agriculture in the US is highly mechanised, capital intensive and jobless. 

Does a supercilious attitude still hide a poverty of thinking in India? Why accuse Ramkrishnan?

@mitra

excellent series of posts.   Growth in India was alway going to be non-linear and heterogenous. The population has got cell phones before it got access to drinking water and toilets and sewage systems (In many or most  cases it still hasn' got them). We all know this. Its not ideal but this the way its going to be. But it still is a cultural shift - now you've seen the possibilties, you demand more.  The old apathy is lost.

 Cell phones of course is the sort of technology that allowed us to leap over the tribalism, zero sum politics and the intellectual poverty of ideas. On a sour note, this is imported technology that is saving us from collapse.

VS Naipual is of course a prescient writer about India. His "Million Mutinies" should be read with his earlier work "An Area of Darkness" to see the change in his thinking. An acute writer picks up on these social changes and Naipaul is one of the best.

but there are a number of statements in this article that are based on his political positions and NOT on his economic expertise.

This is nit-picking . The so called discipline of economics has no leg to stand unless it is married to politics. Every economist's economics is extentions of his political views. It must be kept in mind that the discipline of economics is neither  pure science nor fine art. Economics is politics.

Prof. Sen never mentions the fact that poverty has fallen substantially in India in the period 1980-2010.

That is an incontextual point to make because neither did Sen / Dreaze said poverty level rose. Poverty per se is  relative & subjective . The economists use different a sets of vertcals to measure poverty depending on his politico-economic agenada. For example recently here in India  officially proverty threshhold has been fixed @ Rs.32/- in urban areas & Rs.22/- in the countryside. Most outside the closed coterie of economists accepts this to be any where near reasonable.

The Government of India spends enormous sums of money on things that it calls "social welfare" but which are actually different kinds of hand outs to relatively privileged social groups.

That is an eminently valid point. Welfare & dole do not work specially when no credible delivery mechanism exhists. But a level playing field biased in favor of those to not have access to enterprise climate instead of a system scewered in favor of those who know the government like their palm is required . It is not the case that wealth be distributed by force. The case is incentivise wealth generation at the bottom og the pyramid.

In a democracy, there are different interest groups that are trying to influence policy in their own favour sometimes at the cost of public interest.

Special interest groups would try to influence policy in their favor. The job of politicains & government economists is to strike reasonable balance so that a particular group do not virtually take over governance. Sen has valid point about corporates as  they are yielding disproportionate influence on governance without corresponding commitmet to the society in which they operate.

It would be nice if this magazine also published an Essay by Jagdish Bhagwati or Arvind Panagariya

So you too have favorites ! Fare enough.

Correction :

Most outside the closed coterie of economists accepts this to be any where near reasonable.

Read :

Most outside closed coterie of sarkari economists do not accept this to be anywhere near reasonable.

>> "It will not be out of place to mention that in the US where these neo-libs learnt their economic mumbo-jumbo, agriculture is the highest subsidised indusrty." - Manish

That is not only a wrong statement, but also dilutes the fact that USA treats agriculture AT PAR with other 'industries'. Just like other professionals, the farmers have to learn their skills, adopt technological investments and pay taxes in order to survive competition. What helps Americans is the easy availability of land. USA's population density if 11 times less than that of India.

People fail to acknowledge that similar to other areas, there is a wide chasm between the few rich farmers and majority poor farmers, including farm labourers. I see no reason why the rich farmers cannot modernize and improve throughputs. Or, why they should get tax exemptions.

If one treats our farmers as professionals, there is no doubt that they have failed the country miserably. The idiots who elect their leaders not on the basis of infrastructure, irrigation, roads, electricity etc. but on the basis of caste thoroughly deserve their miseries. 

The idiots who elect their leaders not on the basis of infrastructure, irrigation, roads, electricity etc. but on the basis of caste thoroughly deserve their miseries.

That, sir, is the truth, the whole truth, the naked truth, and nothing but the truth.

Also add those willing to vote for Islamic boot lickers and those who hire on the basis of caste.

Oh! And, I forgot to mention that the farm productivity/ yield in India is worse than even Bangladesh and Pakistan for most crops. In fact, for many crops, an otherwise barren UAE also outpaces India.

Countries like UAE and Egypt are experimenting with multi-layer farming. It basically means that vast land tracts are set up in the multi-storied formation allowing the same plot area to have multiple crops on different 'floors'. The farmers in India suck!!

Oh! And, I forgot to mention that the farm productivity/ yield in India is worse than even Bangladesh and Pakistan for most crops. In fact, for many crops, an otherwise barren UAE also outpaces India.

We can thank those who were anti-Green revolution, and pro land distribution.

And a very ridicuous land tarrif!

Pinaki Ray,
 

You have selectively used DCs remarks from a discussion. Same DC later admired me for my views in same discussion. Noble prize is a western view of the world and will never come to any Indian purely on Merit. Indians will never be able to cross glass celing erected by scandinavians who are the biggest racist around.

Presidency Kolakata, St Stepehen Delhi etc are over rated but dominated by Low IQ people. Since they are esteemed by western colleges the students usually apply for Doctoral degrees and migrate. These hyped students has very low IQ as compared to some one from IIT. It is our misfortune that we have to watch Sibal and Arjun Singh destroying temples of Modern India like IITs and IIMs. You can see always how Jairam Ramesh does good job except when he has to take decision on orders from rahul. You must understand getting in to Harvard is easier than getting in to top IIM. A single batch from IIT Kanpur have enough students to occupy Harvard MBA.

People from Kolkata should not BS here about economics. They must first answer about the mess they have created in WB where 20 infants die every day in single hospital. Whole of Indian success story is pulled down by a single state dominated by kolkatan left liberals.

 

It is non sense that NY times has good articles about India. NY Times correspondents, who are Indians writing about India have same disparaging attitude about India. Have you seen how Annas movement was belittled by them.

Same idiots at NY times interview  Arundhati Sawant repeatedly.

We have allowed the rich to get richer by unfair means. Competition to the elite is curbed. Only the politically connected people will get to do all infrastructure and real estate projects. A poor man with good education will find it difficult to succeed as a business man due to lack of capital & the crony capitalists. Only in businesses like Technology where the rich cant rob what is in a poor man's brain will the poor man succeed. The government should give mining to only the Tribals & Scheduled caste people. Except for the lisence, there is no such thing as innovation in this industry. Why should you give that to people like Vedanta or Reliance? They just dig and sell. That could be done by anyone. At the most a poor man with good education can become a top management executive in this country. the government is squarely to be blamed. 99% of the policies have been made by congress or puppets of them for 58 of the last 64 years. we are paying for it.

The same left right rhetoric backed by zero net new analysis that is actually geared towards solving the problem. Per our constitution, education and healthcare are state subjects in India, not central subjects - this should always be the central fact in any analysis. A very large percentage (upwards of 50% in most states) amount of state budgets are already in education and healthcare. The fact that education and healthcare services are still abysmal as the authors rightly point out, is a result of 2 factors - huge corruption and the lack of constitutional authority for state governments to levy a state income tax (and hence fund these large obligations). The latter is a flaw in our constitution, the former needs to be fixed through a lokpal like institution as well as decentralization of accountability and power (giving panchayats the right to fire school teachers who don't show up for instance). I don't doubt the intentions of the authors, or their intelligence but the article is a lot of ideological rhetoric and lacks new ideas or penetrating analysis that are actually geared towards a solution of a well known problem.

 That is not only a wrong statement, but also dilutes the fact that USA treats agriculture AT PAR with other 'industries'.

Total farm subsidy of US is a staggarring $ 261926768097 through 1905 t0 2010. In 2010 alone it is $ 15244574948. ( source Bloomberg )

Whether it dilutes parity of  US treatment of agrigulture with industry is something I have not commented upon nor  I am in a position to comment. Similarly I did not comment on nature of agriculture , its mechaniastion , agricultural  employment etc.

You chose an aside instead of my main contention that for allround exclusive development of the country agriculture must be the point of take off whereas now it most neglected.

 In continuation of my post # 37 I may add that one the main reason for deadlock in WTO talks is US protectionist policy , specially its agricultural subsidy ; this with the caveat that this not what ai have been talking about.

>> "You chose an aside instead of my main contention that for allround exclusive development of the country agriculture must be the point of take off whereas now it most neglected." - Manish

My contention is not very different from yours except that I lay the blame for this gap on the farmers. Agriculture is neglected because agricultural reforms have never been an appealing issue even amongst the farmers.

As I said before, "If one treats our farmers as professionals, there is no doubt that they have failed the country miserably. The idiots who elect their leaders not on the basis of infrastructure, irrigation, roads, electricity etc. but on the basis of caste thoroughly deserve their miseries. " And, this is applicable to most of the rural hinterlands that have "escaped" the country's rapid growth (farmers as well as non-farmers) .

If one considers the fact that the Indian farmers are considered too noble to be taxed, it automatically translates into a 15-25% subsidy of tax exemptions on top of overall agricultural economics. I don't think any other industry in India has that advantage. 

Unequal development results in satisfaction to one section of people and resentment in other.

No real commitment from govts after opening the economy in 90's to fix it.

And current govt busy to save it's face, rather work on policies.

A concerted effort is needed, and I think we don't have the will to do that, so it's going to be the same for some more decades. With caste, religion, regional factors adds up as which is unique to India, its going to be one fun ride in future.

Agriculture is neglected because agricultural reforms have never been an appealing issue even amongst the farmers.

Farming is an emotive issue across the world. But look at the trends - in developed countries a "family farm" has an economic size of 500-800 acres.  It only requires 1-2 people to manage this. In India productive farm land is tied up in 2-3 acre family farms, though they are steadily increasing in size.  Its my impression that fields are getting bigger and bigger and more farm labourers are becoming redundant.

What can we predict about the future. If we look at what happened in the West and Japan,  farm work will take 5-10% of the working population, compared to the 60-70% it does now. So what will happen to the unemployed farm workers, who will number in the 100s of millions.  This surplus population will head to the cities or take up some non-farm related activity. This is already happening.  In other words India needs to generate 100s of millions of jobs in the next few decades.

The only way to stop this is become like North Korea. It will please some I know even though the North Koreans seem to have famines from time to time.

I don't have a Nobel prize in economics but it seems to me that there is a curious omission in the article. There are lots of generalizations about "India" and "China" but I believe these generalizations are meaningless when one is talking about a country as diverse as India with 1.2 billion people.

Here are three facts:

- The fertility rate of the four Southern states (AP, TN, Karnataka, Kerala) is now *below* replacement rate. The population of India is still growing only because people in the Bihar/UP cow belt are still pushing out kids.

- The per capita income of the four Southern states is now 4 times that of the Bihar/UP cow belt.

- Immunization rates for kids in the South is 75-80%. Figures for the cow belt are once again low: 23-25%. http://www.iegindia.org/workpap/wp283.pdf

These are enormous disparities that exist *within* India, and they dwarf the differences between India and Bangladesh which the authors make a lot of fuss about. They stem from differences in the cultures of these two regions of India, in my opinion. But cultural and religious influences are anathema to leftists and Marxists, which is probably why Professor Sen says nothing about these disparities or what we can learn from them, even though I am sure he is very aware of these differences.

In short, this is an interesting article not only for what it says but for what it carefully avoids saying. A pity.

RICH are becoming RICHER while POOR are becoming destitute in India. Need to be delt  on war footing else could lead to "social uprising" threatening nations stability itself.

-- Commence to subsidise farmers directly by money transfer, as is practised in some advanced nations. If else allow farm produce to be sold at market price. When there is a bumper crop of onion farmers suffer due to poor price but when price of onion go up "export is promptly banned" and price forced down.

-- The RICH should not be subsidised. Subsidised Diesel should be only for public and goods  vehicles. All private Deisel  vehicles upto 1200CC should be TAXED "Rs 10/ per CC engine capacity per year" and above 1200CC be TAXED "Rs 20 per CC engine capacity per year". Insurance Firms be made to collect this TAX as minimum third party insurance is mandatory for all vehicles and needs to be renewed every year.

-- GOVT also shouldn't be subsidised by OIL COMPANIES. Armed Forces, BSF, CRPF, ITBF and other Govt Vehicles should be made to pay actual price of Diesel, Kerosene, aviation fuel etc  to oil companies.

-- Lastly get the LOOTED INDIAN BILLIONS from SWISS BANK and use it for upliftment of POOR.

Tragedy of India arises from soft government. unconcerned people of India.Indian by nature narcissus  they are interested only their family and kins.Whole world go in hell they not concern.Indians depend too much on authority.Every thing government must do.Indians are very selfish  they want everything free and not concern of their duties..how an we remove the poverty.?

 Making a few malls and some roads does not mean that the country is growing. Growth should be measured by how people live, and if we do so, we will not see a very nice picture. 

There has been remarks here about US farming , its large ranch type agricuture , mechanizastion , productivty & above all their low employment generation. Possibly triggered by my stray remark about farm subsidy US . Someone even went overboard to remark that eventually farming in India will employ 5-10% instead of 60- 70%.

The red herring in this line of argument is US farming. Putting US farming pardigm side by side with that of India is to ignore the historycity of farming in the two countries. When colonists came to the Americas they got themselves almost uninhabited continents & capable of parcelling out large tracts of land among a people who were nowhere near in the Indians in numbers. And of course as someone here rightly  mentioned land to population ratio in young US remained high.

Compared Indian agricutural history goes back to milleniums , I can't say how many. By independence our farm land is already fractured & of course cultivable land to population ratio is extremly poor. There is absolutely no way this fractured land usage can be converted in to large farms. ( Indians corporates are going to strife-torn African regions to aquire lage farms).

So predicting land employment based on  the US experience is non-sequiter, irrelevant. Someone said generating 100 miliion jobs  in the next few decades is the way out. He has been careful not to say from where these 100 million jobs will come  & vaguely mentoned 'in a few decades' . One hundred decades ?

Even if these 100 millions jobs are created by sorcery of neo-liberal sleight of hand, what about the the balance 700 milion ? Leave to them to decay in to hungry oblivion?

The point is who needs investment climate most ? The 800 hundred million Indians in the countryside. Yes they are not as enterprising as Dhirubhai Ambani or Narayana Murthy . But first they must keep body & soul togather to become enterprising . It happened in our lifetime. The green revolution was largely state incentivised. Current zeal to create ' investment climate' for a few cronies , larger mass of the people were given a go-by. I never said industrial develoment or incentives to industry is not neccessary. The issue is neglect of the 80 %, leaving them to their devices.

It basically means that vast land tracts are set up in the multi-storied formation allowing the same plot area to have multiple crops on different 'floors'.

Avery interesting piece of information. Would you also please enlighten us how photo-synthesis is simulated ?

Compared Indian agricutural history goes back to milleniums , I can't say how many. By independence our farm land is already fractured & of course cultivable land to population ratio is extremly poor. There is absolutely no way this fractured land usage can be converted in to large farms.

farm sizes in the UK and Europe are also large, yet they also have been farming for millienia. The minimum economic size of a farm in the UK is around 500 acres, yet it also has a very high population density. Average farm size in India is declining and this has  nothing to do with neo-liberalism. There is a crisis developing there. 

It is generally accepted the population is becoming urbanised across the world, even in India. This is not a neo-liberal wet dream. Pakistan for example is slightly ahead of India in respect to this trend. One of the motivations behind programmes like NREGA is to slow down this trend by inventing farm related work and slow the migration to the cities.  Or what were vilages will become towns and towns become cities. 

Some NREGA work may be useful (like water management), some not.  One the other hand it might be better spent on improving infrastructure in the cities becasue if we ignore this trend we will just get bigger slums. But thats a policy decision not up to me and thats all I'd to say on this subject.

The challenge in India of why primary education and healthcare does not get attention is that

The poor have a voice only during election and they are struggling with day-to-day survival, primarily food issues that too to fill the stomach (forget nutrition, etc.).

The middle-class does not need these services because they have affordable alternatives, e.g., decent private schools (to start with courtesy of the so called convent schools).

The rich of course don't need these as public services whether India or anywhere in the world.

Unlike say in the US where the middle-class does need "public" education as a service. They have made healthcare work differently for themselves. In Europe on the other hand, the middle class needs both education and healthcare as a public service.

Hence, India's policy makers right from the beginning whether socialist Nehru or reformist MMS, who primarily come from the elite (rich) and solid middle-class, have never done much except pay lipservice. On top of all this corruption eats away much of the very little that is done.

I can see the primary education scenario changing somewhat with efforts of the likes of Premji. Healthcare I am not very hopeful. In fact, I think things will get worse before and if they get any better given the level of greed is increasing in the Doctors and Hospitals too. May be one day the middle-class will be large enough to count as an electoral factor and also healthcare unaffordable given cost escalations in the sources current used for the middle-class and hence in need of decent healthcare as a public service.

I recall when I first came to Bangalore, I was told lots of doctors charge patients based on their ability to pay (and they treat the poor as well their middle-class patients not very different). That they also do 1 day/week or more of free service for the poor, especially rural poor. Seemed like a good thing in the absence of anything better. Though this approach of the doctors probably is neither institutional nor scalable. But I suspect with the current generation of doctors this has probably changed (and hospitals anyways always look to pass the poor around).

Finally, law has to work - so that the % quota in primary schools for the "poor" and similarly quota in hospitals to take care of those that cannot afford actually has teeth and it works. Today I am sure there are a million ways to get around it.

The artilce clearly highlights that there are two India's.India of malls,cafes,latest style cars from across the world giving a false illusion that all is well and the nation is booming.The real India often hidden or to be more precise ignored is different. To the millions of poor life is hard and a struggle for daily survival. We only need to go out a few miles from any major city and see that not much has changed.If any, the little they had has either dwindld or sometimes as is the case vanished.We  talk of inclusive growth. If one sees the disparity the claim sounds hollow. Our experts unfortunately live in their ivory towers and 5 star ambinece and draw plans which is only alienating more and more citizens.Is that is why more people are living in slums in urban areas and farmers are commiting suicide in the rural areas.

Guys, I was just thinking, how about a tax rebate for anybody willing to pay for the education for less privileged schools in competent private schools, same for poor people in the Private hospitals.

This looks like thew only solution, because there's no way to fix the merit-starved Public sector.

Your thoughts,

Prof Mitra (Chicago)

I read with interest your posts . As regards economics, I subscribe to the view of another Mitra (Dr. Asok Mitra, the left wing economist/ Professor of ISI - turned politician who became finance minister of West Bengal) that economics cannot exist without politics.. Economic policies of a country reflect the predominant political view of the polcymakers in power, because fundamental assumptions behind any economic ipolicy are shaped by political beliefs. The left leaning economists Sen and Druze  would favor involvement of the government whereas University of Chicago school (or Milton Friedman school?) of right leaning economists will swear by free markets alone. In reality, economists from both sides know that neither the free markets nor the governments have proven to be superior over other under all circumstances. We want state as much as we need free markets for various reasons, notwithstanding the stated or unstated political views of the economists,

For Ramakrishnan2

 With such imbecile comments about Amartya Sen (have you ever seen his resume?) and Harvard/IIT etc.you are not only embarrassing any IIT or IIM  you have gone to but also insulting your own thinking ability as a matured individual. Please read your own posts once again.

For Narendra and others

Development economists Sen and Druze have been researching about India's economic development for many years. So their opinions are not based on a very superficial understanding of Indian econnomy, even after acknowledging their left leaning political views..

India's spectacular GDP growth in the last two decades is commendable, but it should not be a camouflage for hiding many of the long lasting structural problems of its economy. Prof Mitra can rightly point out  that Sen and Druze should acknowledge the progress that India has had on certain economic indicators, while criticizing failures at others. However even then I  wonder if we could even be partly satisfied with the mixed results. Ironically in India's case the state's involvement in all economic sectors has been historically more and not less. But because of our politics of pacifying too many vested interests and the corruption at every level the state's priorities have often been misplaced, and  the targeted programs to address poverty did not meet adequate success. It is not the lack of government involvement but the lack of governance to efficiently run social programs that create India's problems.  OIn the other hand, while cheerleading the economic growth the policy planners are not doing enough to reform the process of delivering the basic services to the weakest section of the society.

Instead of defending our current policies or criticizing their critics, it is  time we figure out why the international development indicators put us well below a large number of developing nations anywhere in the world. All the super power notion appears mere fantasy when we look at our pathetic performance based on those indicators. Interestingly other emerging super powers have not been as faulty as us to ignore the basics.

Excellent analysis for us to read. The issue of economic growth has several strings that gets pulled in different directions. Prof Amartya Sen presents it very effortlessly for all. Unfortunately, our sarkari economists including Montek, Chidu and Pranab do not have poverty alleviation and equitable distribution as a mission from the top. I am sure they understand the effects of their policies but the indifference in our Sarkari karmachari's mind does not enable him to think except self interest, party interest or sugar papa interest. The least of our problems is finding ideas for addressing the problem. The biggest problem is "who will bell the cat". Here belling the cat means, stemming corruption, making governance accountable, etc etc. but that is democracy and we are living in a feudal, midivalist, anarchist republic. I will still try staying positive as adviced by Dr Sen. I hope the Swiss Bank account of Chidambaram, Sonia , Raja, Kanimozhi, Robert Vadra, Raul Vinci Gandhi and Kapil Sibal are frozen some day.

@DC

I DO want better HDIs, we ALL want better HDIs, but do read Fed Up's post on the culture factor, TN and Kerala have far better HDIs than in the bovine belt, Himachal Pradesh is a second world country in its own right.

Sen,Roy and other leftrards know too well the reason behind India's poverty, India's Socialism is not meritocratic, you either need connections or a caste certificate to get employment not qualifications.

You can only imagine the shrieks from the comrades if we started fixing our bureaucracy by ensuring that only the best get recuited.

They KNOW why Muslims and Dalits lag behind other communities(especially the ones who lost their homeland in Pakistan), they KNOW why we have such horrible Government hospitals.

They know that this is not mono-ethnic Germany, Sweden where politicians get elected for the sole criteria of competence and efficiency, or which is likely to hire the best doctors(any public sector employees) available, not based on your surname.

Do we really think that the Scandinavians would ever vote for a Digvijay Singh, Jyoti Basu?

Indian society is too diverse for its own good, I doubt whether we'll ever vote for politicians based on competence.

In the short term, we can offer Tax rebates for Private company employees for paying the fees for poor students, treatment at private hospitals, and other such social services that can be fulfilled by private companies.

But other than that, I see no way to fix the Indian public sector.

There is a reason why MONO-ethnic Han China, Bengali Muslim Bangladesh perform much better than India.

Modhusree Mukherjee vs. Amartya Sen controversy over Bengal famine  is well known. Madhusree puts the blame squarely on the British  archtypical colonialist Churchill. Sen arrives at the conclusion that democracy is better equipped to handle such famines & had their been a democracy, the '43  Bengal famine could have been avoided. There is no fundamenal issue in this controversy. Rest is scholarly cribbing.

So bringing in a entirely different matter in context of the current essay is mischievous & motivated. Jean Dreze is intimately involved in the current Indian poverty issues who also recently resigned from NAC & co-authored this essay. Besides Sen, views expressed here are also that of  his.

The problem with counting the poor is the target given to each state, that you would have these many poors only. How can they define poors themselves without doing an actual survey? This is farce and totally unjustified. States are redefining povery lines, so a poor in one state may not be a poor in another, why this discrimination?

Omesh Bharti

GAJANAN,

What is your point? Are you saying something we should be paying attention to? Are you saying you are as demented as the rest of the Congress government?

The second point comes through quite well. The first point does not!

DC,
Qualifying for harvard is only 94 percentile and median is 97 percentile  GMAT. There are scores of 99 percentiler in IIT in one batch. My close relatives have joined MBA. Other courses are much easier.

But you missed my actual point. The DATA about poverty is highly questionable. Second tribal population is not trying to change its life style and there is no way you can bring them above poverty line.

The milton friedman variety of economics works on efficiencies gained because of competition. The economics of left while good for better distribution also promote lethargy and loss of efficiency. for example Competition is now pushing Indian manufacturer like Bajaj and TATA for fuel efficient vehicles but in licence era they never bothered about this quality. Material conversion efficiency though small in initial days becomes very large after few years. that is the reason russia failed and china changed.

WB is prime example of how left liberal BS has pushed the state in to poverty. The attackers of NaMo who criticize Gujarat day in and day out always skirt the issue of 20 infants dying every day. 


But the poverty figures are highly questionable. Except for east UP, Bihar, Jharkhand, Orissa, WB and eastern states, rest India show very little demand for NREGA jobs. Even state of MP considered to be among poorest have no takers for NREGA because average wages are much higher than NREGA offer.


But my solution is totally different from what economists suggest. My observation is government spends money in projects which are jobless. The Road, Power plant, Mines every thing is given to high networth group who after buying imported equipment then transfers the money for aquiring foreign assets. Whole of this economy just uses Indian loans but foreign equity and bypasses India to benefit Indian people. Solution is obvious:

Tax bigger groups a competiton tax so the SMEs gain market share.
Instead of bunching tenders for bigger quantities the works should be split and parcelled out to smaller but competitive firms.
There should be internal competition between government departments and two seperate entities should call tenders for same job and lower one should get the job to execute.
Increase Income Tax from 30 percent to 60 percent for rich.
Impose Wealth Tax
Bring back Law on land ceiling. The resultant inflation because property prices have become 100 times in 40 years thus pushing rental component on trade is huge. The net prices of vegitables or food sold in markets carry this component of cost push.
Income Tax as percent should be lower in proportionate to Indian public holding. This will push for promotion of Investment culture and more peoples fund will come to market and it will not be looted by mutual funds.

A smooth transition to real competition from crony capitalism will push money towards middle class who will higher more goods and services from poor benefitting whole economy. Thats what Occupy Wall street also says.

@narendra

TN and Kerala have far better HDIs than in the bovine belt, Himachal Pradesh is a second world country in its own right.

Himachal Pradesh is also ranked second to Kerala among states with the least corruption, atleast according to Transparency Internation. I wonder why that is - HP is not mono-cultural, its as fractured as any Indian state. The neighboring Uttarakhand state has a similar culture and history but its a middle performer in HDI terms.

Kerala state is no 1 in HDI in India. W. Bengal state is around 19. Yet both have been dominated by CPIM culture for decades. What gives?.

Corruption is a serious issue in India and it seems till the Anna Hazare movement came along, the bureaucratic class colluded with the leftist types to suppress this. This whole article is really case in point.  We may still have to rely on foreign media for anyting like the truth

Wall Street Journal:

World Bank Disgrace

"Yet nothing we've seen so far can compare to what has now been uncovered about five health projects in India, involving $569 million in loans. "

In the $54 million "Food and Drug Capacity Building Project," for which money is still being disbursed, the INT found "questionable procurement practices, some of which indicate fraud and corruption, in contracts representing 87 percent of the number of pieces and 88 percent of the total value of equipment procured." That is nearly $9 of every $10 in aid funds.

New York Times

The first doctor to die, a senior government health administrator, was shot on his morning walk last October by two men on a motorbike. Six months later, his successor, a cardiologist, was shot to death while out on a predawn stroll. A third government doctor, accused of conspiring to murder the first two, was found dead in jail in June, lying in a pool of blood with deep cuts all over his body.

The one thing the doctors had in common? All three had at one point been in charge of spending this city’s portion of the nearly $2 billion that has flowed to Uttar Pradesh, India’s most populous state, as part of a nationwide push to improve the health of India’s poorest citizens.

This is Afghanistan level of looting. The more government spends in the social sector the more funds get looted. It seems like the state adminstrators are determined that the target population should get nothing.  What is alarming is that the entire system colludes in this - from inspectors to health professionals to contractors. There is simply no understanding of the concept of duty.

But there was no mention of anything like this in the article. Instead it was a dull, dry sarkari type report, oblivious to ground realities. What was the point of the article?. Was it calling for another grand centrally sponsored scheme?. 

 On that point I agree with RamaKrishan2.  Spare us from the mediocity.

 Post # 58:

"What is your point?" -

Excellent point !

I could not make any "point" out of that gobbledygook excepting for noting the following:

 "This is surely a serious lapse for an Arguementative Indian." -

In other words, how to debunk Amartya Sen NL !!!

The Bengal Famine in 1943 has absolutely no relevance for the theme of this column ! 

 My reference  to Madhushree and A Sens tete -e tete was only to point out that , there is something confusing in the numbers of production of grain. I have just said lapse and not derided Sen, Here is a mild exchange between Mark B. Tauger with a  reply by Amartya Sen. 

http://www.nybooks.com/articles/archives/2011/mar/24/truth-about-bengal-famine/

Then if you want as Pinaki Ray says  debunking  says, see the web page of  Dr Peter Bowbrick,

I also do not agree with many points of  Peter Bowbrick  I have been very mild . Just read Dr Peter Bowbricks reports 

http://www.bowbrick.org.uk/index.htm

http://www.bowbrick.org.uk/Famine%20pages/famine.htm

Rents are higher because of rent contol act.

Bringing in Land celing act will push up property prices because of lack of housing. Property prices are higher in India because of rent control act (since older properties cannot come to the market and lack of rental market). Historic shortage of housing has also created the housing price inflation.

There is a problem of product market competition; thats because primarily for SME's it is very expensive to hire labour (because of labour laws) and poor infrastructure (they cannot afford to have inhouse electricity plants, water etc)  making their fixed costs very high compared to big producers.

But who cares for economic logic.

My reference to Madhushree and A Sens tete -e tete was only to point out that , there is something confusing in the numbers of production of grain.

That does not explain why that issue was relevant here. Giving plenty of web adresses which are famialiar to those who interested does not wash. And 'tete - e tete' ?  Some people do not know what they are talking about!

Gajanan,

        I find your postings/links very interesting as is the discussion on this thread. Please post them here and please do keep posting on it. I've gone through Madhu's book, but not these discussions you posted

Thank you

Narendra .... I am not sure I understand exactly what you have in mind. However, there is an Education CESS which has been around for a while. Personally, I would like a say in who that goes to. My thoughts were that the Government puts up a list of approved parties in the space of education. When I file my IT returns, I apportion the CESS to 1-3 candidates in that list. Today as always with any money I give to the government I just feel it is wasted and the only reason to give is because it is the "law".

On Healthcare, I just can't visualize a solution at all towards improvement from the present state of affairs.

I concur with recent interview of kaushik basu that government should pay Rs. 12/day to every one in most poor districts like Kalahandi and every one in west bengal to alleviate hunger. This direct transfer will ensure proper quality of food is trasported to them without losses as happened in PDS. They will also save running of 5,00,000 PDS shops which at minimum require Rs. 12,000 per year as expenses. The overheads of PDS at 6,000 crores or it could be 25,000 crores is saved and money is transferred via banks and paid in public meetings.

We must pay Rs.12/day to kolkatans from where we get those poor left liberal seculars who do nothing but comment on gujarat.

India now have 140 million TV sets as per wikipedia. Actual figure may be higher because there is huge rural market for old TV. If average house have 5 members then 70 crore people cannot be called poor. similarly per year 4 crore fans and 53 crore bulbs are being sold. All those who buy fans and bulbs may not be poor.

Engaging in a debate on the definition of poverty is meaningful only for political reasons - the left will discredit any achievement on the wealth creation and the right will underplay the flaws in wealth distribution by arguing on the absolute size of poor population. However, it is fruitless to argue about poverty in India. It is abysmal. It stinks.  Even if you don't go to a village to see the rural poverty, which is even more extreme, you can meet poverty in any big city or a small town. Statistics and various  techniques to  estimate or exaggerate or understate poverty figures will not wish our poverty away. So let us not kid about the size of poverty-stricken population - it is huge -suffice it to say.

Unfortunately poverty alleviation like infrastructure development cannot be managed by private initiatives- no matter how large. You can donate to a charity like "Pratham", take your income tax break and assume that the NGO alone will take care of India's neglected primary education of the poor. It cannot happen. You still need the government. True, the government officials are corrupt. But how can you give clean chit to the private hands? The corrupt contractors who loot the money from public welfare projects in collusion with the government employees are private sector outfits. If we generalize all government institutions as equally bad then some of India's foremost educational outfits, business and financial enterprises owned by the government of India should not have been respected for their competence.  Many Indian entrepreneurs who are currently revered as industrialists by Indian media are third rated thieves - ask any banker or investor who had dealt with them in the past. Even in the world of private outfits in social sector, haven't you heard of the dubious NGOs created for siphoning off money and tax credits?

My argument here is to debunk the myth that in India the government and the public sector is absolutely bad and corrupt, while the private sector is absolutely efficient and corruption-free.

Large scale poverty is a serious development  issue- arguing about its size is meaningless. The government's targeted programs are still the best options to tackle large scale poverty. If certain states perform better  in delivering the welfare programs for the poor, the lesson should be that the other states can also upgrade their performance learning from the better managed states. Since corruption is an issue, the schemes need to address it. However, if we choose to discard government funded welfare programs citing corruption or for political ideology, it will be akin to suggesting beheading as the best option in the absense of a better remedy for headache.

 However, it is fruitless to argue about poverty in India. It is abysmal. It stinks

And how do you go about it ? Remain in denial , because some has huge stake in the status-quo. But as  has been said you cannot wish away the fact of poverty. So what do you do ? Shoot the messenger instead of taking a hard look at the message.

This denial industry has a pattern. Discredit personally those who takes the contrarion view.

Last year the denial industry went all guns blazing against enviornmetalists just before the Oslo Climate Conference.. They picked on R.K. Pachuri & calamnised him about millions he mulcted or his $ 10000 suits.By the time the The Daily Telegraph was forced in to an apology to Pachuri, the damage has been done. The ground for deep-sixing climate concerns at Oslo has been successfully created.

Amartya Sen researched famine quite while ago. Madhusree recenty stumbled independently on the same issue through a different route. She wrote a largish book. Not just a tete-a-tete. While at it, she alleged some inaccurate data in Sen's research conducted half a century ago. Some say Sen was correct & some would say Madhusrre is correct. Nobody in scholarly circles dismisses Sen's conclusions out of hand. Her issue with Sen was just a foot-note in her biggish treatise.

Sen & Dreze  here looked at some data from a demi- official source & pointed to kinks in the growth & development story. That wo'nt do. You are not allowed to talk poverty. So discredit Sen & Dreze by calumnising them .Go in a tangent to discredit Sen personally via Madhusree for his crime of telling poverty still exhist. And while at spice it up with some leftist-rightist drivel.

  We are looking at the larger picture, and noticing the small details in the picture. We cannot do both at the same time, and doing both one after the other, makes us forget what we were looking at earlier. What is the problem actually? Looking at how many children are immunized for smallpox, and deforestation, are seen as different issues, but they are seen to be a part of the larger picture. We have neither been able to alter the larger picture, nor the details. Dr Sen and Dr Dreze are identifying the problems, but we cannot do justice to them. 

 The issue is, that deforestation is not avoidable, in a small extent, and the smallpox vaccine is important because children are not all immunized. So, why are we making the problems so important, that we make deforestation a major problem, by felling major forest areas, and leaving many children without the smallpox vaccine, when we can vaccinate them? This is surprisingly happening all over, in every consideration of national interest.

 The reason why the Bangladesh government is working, is because the democratic process has been revived in the near past, and the people will not take democracy nor it's institutions for granted. India takes it's existence for granted, or it's citizens do. The Bengali's in Bangladesh, do not care about the government, but about how the government functions. More importantly, the people are making a difference. People are immunizing their children, if they have them, in Bangladesh, and I assume, they demand immunization facilities from their government. The Indian government is collecting taxes, but how can she make the taxes matter to the people? The taxes are the property of the people, even in a democracy. Ultimately, the government servants are being paid, and government stands on taxation. 

 Ultimately, taxation is not the end of government, but the peace of mind of  the people of that country. I know, that if India was secure from within, and without, then taxation would not be a consideration. 

 The government needs to function, but everything cannot be such a great priority, that the priority takes precedence over the issue. I hope I have been insightful, but I believe, I have been, only to a small extent, perhaps.

As a matter of fact,'POVERTY' caused by the ruthless over-exploitation of India by the imperialist power of the world in the past and at present time.

GAJANAN GALORE!...

Please post your links on a article about India's famine in 1943 and an article on the critical analysis of Sen's work. We are talking of India's development and Sen/Dreze analysis of the situation. Unlike you we are pretty much aware of the ground realities and an economist's analysis puts the entire picture in sight.Economics is the social science that analyzes the production, distribution, and consumption of goods and services.

So the point is Economics is still a social science!.. Unfortunately, most have forgotten that basic fact. If Economics is not a social science ...it is also a irrelevant science. An economic policy not based on social good does not warrant a department, a minister and 2000 years of theory.

Wake up and read some more!

 "My argument here is to debunk the myth that in India the government and the public sector is absolutely bad and corrupt, while the private sector is absolutely efficient and corruption-free."

When you build strawmen as feeble as this, it takes absolutely no effort to debunk it.

Lots of things have changed in India in the last six decades. Democracy has rooted even deeper. The exploited classes and castes are getting their political power. Wealth creation has created a sizable layer of middle class that had been non-existent in a society of few very rich and almost all poor people. Industrial and economic progress has also caught attention of the west that had hardly noticed a post-colonial India.

However, surprisingly what hasn't changed in all these years is the functioning of India's government . The MPs and MLAs, the ministers, the bureaucracy and lakhs of government employees haven't changed their way even a bit. They still have little or no work, their pace of work is slow and tardy, there is little if any accountability to the public, bribery is an entitlement for doing the routine jobs, extortion of the powerless by abusing legitinate authority is common and the inefficiency of the system is taken for granted. The so-called economic reforms in 1990s that Indian government takes credit of now were nothing but elimination of several functions of the government to police and misgovern the economy. No wonder  many politicians equate economic reforms with the abdication of the government's responsibility in any economic sector, as if the non-performance of government financed by the tax payers is taken for granted along with its existence with authority but no accountability and responsibility. This machinery operates without any reform of its own. Parliamentarians routinely approve hikes in their own pay and perks , successive pay commissions raise the salaries of government employees irrespective of their performance, political parties continue to buy legislators/parliamentarians to stay in power during confidence votes, new states and jumbo cabinets are created to accommodate more politicians eager to share the gravy train, large inefficient ministries are never downsized to appease the ministers in power and the political scams continue to grow in size in line with the economic growth.

Any improvement of the standard of living of the poor calls for a radical change in the functioning of this machinery. This change can come only when Indians will demand change through large scale political movements. Unfortunately all the established political parties are comfortable with the status quo and are unlikely to initiate any political movement. Since the majority of the poor in India still vote based on caste, class, religion etc. the pressure on politicians for better governance is still not strong. However, Anna Hazare has proven that even outside the partisan politics if an agitation starts with popular socio-political issues e.g.corruption in public space  it could mobilize huge public support.

My own pipe dream is that someday a large population of Indians will demand accountability from those in charge of governance and a large scale political agitation will be launched within or outside the traditional partisan political system demanding reforms of the overall government machinery. Until that happens, any welfare program for the poor will meet limited or no success. That doesn't mean that I recommend the government should withdraw from social welfare programs.

 "Since the majority of the poor in India still vote based on caste, class, religion etc. the pressure on politicians for better governance is still not strong." -

This is just a conjecture. I hold radically different view on this matter. The vast majority of Indian voters are politically extremely astute as well as their counterparts in the middle and upper echelons of the Indian society. And remarkably, this is inspite of their illiteracy, poverty and "backwardness" and what not.

This has been proven time and again. Congress under Indira Gandhi first achieved a grand victory in the 1970s, but then was annihilated in the next election with Mrs Gandhi loosing her seat in Amethi. That was a resounding message to the international world at large that Indians are fundamentally democratic as a nation. And that point went down extremely well in European circles as could be ascertained from the news media editorials appearing in that era all over central Europe.

In the subsequent years, Congress was soundly defeated country wide for power holding in the Delhi durbar. BJP was given twice the opportunity to fix the political affairs of the nation. In fact, BJP sat on the thronefor full 10 years. And what did they deliver ? - Absolute chaos and rampant corruption (Pramode Mahajan ?), farmers commiting suicide in Chandrababu Naidu's glorious state , etc etc. 

So there you have it - the Indian mass elected Congress again back to power. Time will tell what happens in the immediate future again. Politically savvy observers take the Indian mass very seriously in so far as their excercise in the ballot boxes.

There is one aspect missing in this debate. That has been encapsulated in the Clausewitz principle: Politics, Economy and Military Power of a nation are locked together.

In recent years the Indian Armed Forces are spending billions of dollars in armament acquisitions. These sums of money, if used say for building infra-structure in the country side, could have uplifted the standard of living for the poor and have ushered a new political vista in the villages.

But that expenditure on military is absolutely necessary for the survival of the nation in the long run. Years of neglect and callousness during 1985-2005 with bankrupt foreign policy have left the military in doldrums.  In my view the Hinduwallah BJP is the real culprit in this context.  One example is the following. By talking privately with some military officers over time I gathered the information that after the Sumdorong Chu flare-up with the Chinese (1986) in Arunachal, the IAF recommended some urgent action for infra-structure creation in the area. But their advice fell on deaf ears of the BJP then in office.  It is to the credit of the present UPA, that MMS has sanctioned all such projects across the military for safeguarding the nation's boundaries.  And this inspite of all corruption raging all over the administration. So one sees the imapct of the miliatry on economy and vice-versa. 

For students and teachers of Economics and especially Indian Economy, the arguments advanced in this article on the country's  spectacular Growth and and painfully slow Developemnt processes during the last two decades of Liberalisation are all familiar. Hence, they would very much appreciate the  well-known  arguments of this piece.

However, it  should be an eye-opener to the apolitical/unbiased and/or upwardly mobile right-wingers --especially the youth-- working  in the IT/Service Sector who assume that everything is OK with Liberalisation/ Globalisation and Corporate Capitalism.

This, provided they can spare a little time from their busy schedules to ponder over the  lot of the poor, downtrodden, unemployed/under-employed resource-poor people suffering from low incomes and deprivations in education,healthcare, transport, drinking water and sanitation--lot of those who are condemned to live in INDIA THAT IS BHARAT. 

 Adjoinder to my post # 77: please read for

"... ushered a new political vista in the villages"

the following:

"...  ushered a new economy and consequently a new political vista ...".

To clarify the point I wanted to convey is that military budget is a heavy burden on Indian economy at this time and has been over the past years. None of India's neighbours carry such economic burden. Pakistan's military is heavily financed by the Saudis and other sources in the middle east whereas India has to bear all the costs herself. The Bangladesh war cost India a fortune.

Hence, the statistical data presented here should be interpreted as very favourable for India taking into account the overall picture of national politics and strategic environment. But the military expenditure should also be looked upon as a long term investment for the Indian state and could bring dividends in the future. For example, if India succeeds to have a foothold in Afghanistan, she could have a bite at the pie of the huge mineral wealth loomimg there. India has recently had a tiff with China in the coasts of Vietnam where Indian naval ships were sent for oil exploration in the sea bed. Such a venture could bring a windfall in future, but would not have been possible without strengthening the Indian navy.

This all confirms the Clausewitz's thesis for a nation like India that politics, military and economy hang together. American economy has landed in doldrums for fighting the war in Afghanistan. One cannot get a full view of the economic performance of a nation basing on economic data sheet only.

There is much to be pessimistic about India - in fact it is probably the easiest thing to do. As a culture there is just so much wrong with us that at least I know I get overpowered with hopelessness frequently - doesn't really matter if the problem is Hindu caste, Muslim invasions, European Colonialism, Nehruvian socialism, whatever.

But then I remember 2 instances and I feel there is a definite change and reason for optimism within the gloom, tomorrow will be better than today. The people in these instances aren't looking to be nation sitting at high tables of the world, an aspiring super power, whatever. They just work harder today than yesterday to make a decent living and provide for their families without expecting someone else or the government to dole them out.

1. Around 2004-05, I recall taking a taxi. The taxi driver looked quite unlike your typical taxi driver - he was tall, regal looking with an air of confidence about him. I asked him from where he was. He said Rajasthan - a small non descript village with not much going on. He did three things everyday - do interning in a machining shop in the day (learn his chosen trade from experience), drive taxi in the afternoon (to fund his studies) and study at ITI in the evenings - 16-18 hours day everyday. His dream was not a government job but after diploma start his own machining shop. He wasn't tied to his family's state for his future. This to me appeared very unlike Indian. Much more common - this attitude, effort and self confidence in the US but not India - where government largesse and how to divide the slice more in your favor by the accident of your birth is still the dominant theme. Can this be encouraged in more or those who come with this come with it and those who don't don't (and we are just stuck with more of those of don't and hence our solutions need to be limited to that reality)

2. There are stores in my area (called fancy stores carrying mostly made in china stuff) and also normal appliances/kitchen utensils stores. All of these started and owned by families who migrated from Rajasthan during the boom. These guys speak Kannada so well you cannot tell they aren't locals. They also retain within their families their culture. Great shopkeepers - great customer handling and service - always a smile - whether you wanted a Rs 1 item or one for 1000s. From all appearances very successful and spreading. It is as if a few villages have taken over this trade.A confident people, making life in an alien land and environment, both adapting to it and retaining their core. In a latest experience, I interacted with most likely the daughter of the owner. She came across as a bright chirpy street smart 12-13 year old studying in the local neighborhood school. The way she was handling herself with customers and others who worked (elder brothers, cousins, uncles) was such that jokingly I asked - Are you the manager? She said not yet but I will be one soon enough. Again can this be encouraged and supported to be more the norm than the exception?

@Pinaki

The reason for the low HDIs is none other than our old friend, Affrimative action and our voting patterns.

Before I'm denigrated by the left, let me explain.

Take the public hospitals for example,

The idiots in the comrade camp, recommend that we hire doctors from the unprivileged castes in order to lift this BC out of poverty, regardless of competence, now the better qualified does lose out his post to somebody less qualified than him, a caste discrimination that is allright with the Marxists.

But what of the patients who depend on public hospitals for basic care?

Does it make any sense to have 100 unprivileged people treated by a incompetent doctors putting their health at a risk over hiring a competent doctor to treat these patients?

Who is the biggest loser again?

The same applies to Government schools, bureaucratic posts, everything that has reservations.

Why do you think the Government turns to the comparitively meritocratic for everything?

From handling insurgencies to rescuing kids stuck in the well to , heck, even building bridges.

The only kind of Socialism that ever worked was the meritocratic Right wing Socialism in Germany in the 1930s, and you know how close we are to acheiving a system like that.

 As for the voting patterns, most Indian voters don't vote on the basis of comepetence, so if a Health minister performs poorly at his job, he can still get reelected if a certain community is partial to him, take a loot at 90% of our politicians and you'll know what I mean.

India's diversity is a curse, someone mentioned Himachal Pradesh as a successful, diverse society, well, an exception doesn't make a rule.

I'm implying that,

Does anybody here work for private companies?

We get a tax rebate for uploading JPG files for our HRA receipts as proof of our residence fees.

We can apply the same practice to all employees who've paid for a poor kid's education, healthcare, we simply upload the receipt as proof that we did.

Tax rebates for paying for social services, we just eliminate the middle man, the incompetent lazy Government babu.

Everybody knows that our public sector is nowhere near to getting its act together.

Narendra ... "We get a tax rebate for uploading JPG files for our HRA receipts as proof of our residence fees. We can apply the same practice to all employees who've paid for a poor kid's education, healthcare, we simply upload the receipt as proof that we did."
 

Another recipe for just malpractices and corruption. HRA misuse is one of the most common items of salaried working class cheating to cut down on taxes since the salaried middle class hs very few options to save on taxes. Even those who claim to be pristine pure and teflon coated, if you dig enough you will find HRA misuse.

All that will happen with your proposal will be mostly false receipts. They are available dime a dozen.

Even charity donations in India is fraught with malpratices.

My thought therefore was to see if Education Cess can be better directed and utilized. Cess is something we pay - if we pay taxes we pay. Can we say in it's disbursement? Personally, I would like to give the Cess I pay to Premji's education initiative or Parikrma a great school system in Bangalore for the underprivileged built on very sound principles of equality and self confidence.

@Arun,

That's an idea, we need to come up with more ways to reduce dependence on the Government, it's the enemy, not the friend.

Public schools can't hire teachers who can even spell 'Sunday'.

Another idea is to let the creamy layer in the OBC category compete in the said quota.

Because at the end of the day, it is the system that is the ability of the institution to provide quality services to 100 poor people that is much better than an intstitution which hires one unqualified person at the expense of 100 poor people.

Let's take Malaysia and Singapore as examples,

Is the ethnic Malay better of in Malaysia which offers him unfair privileges or is he better of in Singapore which is more meritocratic?

very good article.I have also read the book (Argumantative Indian) written by respected Amartya Sen.I thinksome of our leader, politician,policy maker of the country should read that article to gain some knowledge.

Narendra

Before you take an absolute stance, please debate with yourself about your own ideas. Government is the enemy #1 is a blatant lie, we all are beneficiaries of the government for some reason or the other. Millions of college educated Indians who constitute the affluent middle class today are or were beneficiaries of Nehruvian socialism (as media calls it). If the college education were not highly subsidized, the students from ordinary low income families could never achieve socio-economic mobility. 

Note that socialism in 1950s was not unique to India but existed in all developing nations through 1960s and prescribed even by the World Bank at that time. A post colonial India deficient of resources, almost non-extant manufacturing base and small size of private sector  indeed gained from the 5 year planning model. However after setting its economic fundamental following 200 years of colonial rule,  India during Indira Gandhi regime instead of liberating the market forces came up with a draconian permit-license Raj to exercise excessive state control and achieve political dividend. It only gave us incompetent governments, colossal losses of an unaccountable public sector, and economic sufferings of all Indians due to poor economic growth. We all know that the market based reforms should have been introduced about a decade earlier. But that does not trash all the achievements of 1950s to set the country on a more stable (albeit weak) economic footing .

I do appreciate your frustrations of otherwise meritorious candidates becoming victims of politics of reservation. Reservation may not be the right solution , but whether meritocracy should ignore the issue of social injustice is a debatable matter.

In another post I  elaborated why your idea of only voluntary private initiatives to help the poor is not a practical solution.  Even now you can take a tax benefit in India by donating  to a charitable institution that works among the poor . Unfortunately, every moneyed person is not as generous and philanthropic as Bill Gates and Warren Buffet. People may choose to pay taxes instead of making charitable contributions. Donations from individuals in any case can hardly match financial resources of the state. More importantly, there is rampant corruption in producing fake charitable contributions (and fake HRA receipt). How can a voluntary initiative through tax inducement that is also vulnerable to corruption replace a systemic approach funded by the state? You need more engagement of a responsible and reformed government in social sector, not its complete withdrawal or its replacement with volunary private initiatives.

The most objectionable part of any right wing agenda is to demonise the government when right wingers need to pay taxes and never to acknowledge that they are also beneficiaries of government policies for  their own economic welbeing. "Privatize the profits and socialize the losses" is the real mantra of the right.

Till date there are 86 responses to this article...that means people care about India's economy and its path forward. There are many sides to the argument but it definitely sounds that the current path is definitely a path of doom. The question is then why is the government continuing to persist the same policies? Is it because they realize that once out of power they will never have a chance to come back? Is this the scorched earth policy of MMS looting army out of Delhi? It definitely has the colors and textures of a political party, which knows that history books can only be authored and written at this time to control the damage that is about to reveal itself after it leaves. Is it why it published a motivated history of its party?

'Government is the enemy #1 is a blatant lie, we all are beneficiaries of the government for some reason or the other. Millions of college educated Indians who constitute the affluent middle class today are or were beneficiaries of Nehruvian socialism (as media calls it). If the college education were not highly subsidized, the students from ordinary low income families could never achieve socio-economic mobility. '

Oh come on, save for a few IITs and perhaps 60 other colleges, Indian colleges lack even the basic infrastructure,IT courses hire lecturers who don't even know Basic Java, etc.

Graduates from the bulk of Indian colleges are a little better than American High school passouts.

Most middle class Indians have had NO access to colleges that could even be called 3rd tier colleges in the US,UK.

And the select few that DO have the necessary infrastructure, reserve 50% seats for SC/ST's OBCs, actually its much more than that in Tamil Nadu.

And when people want to introduce foreign, good quality universities in India, the left shrieks that they'll lure away quality lecturers.

I'm sorry, what exactly is a student born in an Open category supposed to do, what would the left have him/her do?

I can't compete for 50% of IAS posts, Medical posts in Govt hospitals, I'm not even supposed to pay pursue a decent college degree in private universities?

I don't think any parent would have a problem saving up 10 Lakhs for his/ her son, provided he can study in a decent college, and there are Banks eager to offer loans, so, no I don't need the Government.

Me and my siblings forked out a good 80 K per annum for a quality college, so, no, I have nothing to thank the Government for.

Secondly, I never said anything about the better off not helping the worse off, read Arun's post about education cess, Tax rebates for paying for the poor.

@Arun and DC

We can prevent fraud by labelling each receipt with a Transaction ID, and the private institutions like the schools and hospitals can maintain a special database for these Transactions, not to mention providing India's poor people with another ID, so as to make sure this scheme is not abused by the affluent.

The IT department can then access the details of the transaction for the receipt and then verify that the candidate has indeed paid for the service and grant him that rebate.

Reservation may not be the right solution , but whether meritocracy should ignore the issue of social injustice is a debatable matter.

Ehh?,

1.How is it Social justice when a meritorious, but poor candidate form the Open category loses out his job to a rich kid from the so-called Backward caste.

2.How is it Social justice for the 100 poor(most likely BC) people get treated by a lousy Doctor, get taught by an underqualified teacher?

Just to provide employment to that one, that's RIGHT, just ONE, candidate.

I'll explain this until, the brain dead left gets it.

i)Reservations hit social services hard, more AA mean that the lousy Public sector goes from bad to worse.

ii)Poor people depend on these services more than the Open category

Conclusion:

Poor people get worse services under AA.

How exactly has appointing underqualified candidates for the IAS improved the lives of the poor people of India?

The most objectionable part of any right wing agenda is to demonise the government when right wingers need to pay taxes and never to acknowledge that they are also beneficiaries of government policies for their own economic welbeing.

No we're not, read again and again, about the state of colleges in India.

@dc

Government is the enemy #1 is a blatant lie, we all are beneficiaries of the government for some reason or the other. Millions of college educated Indians who constitute the affluent middle class today are or were beneficiaries of Nehruvian socialism

the beneficiaries of Nehruvian socialism model only went to a few. Granted in India that may mean a million people over the years. But the combined annual output of the IITs is less than an top engineering college in the West. 

this is the congress model of governing. Ration out resources and have everybody fight over them. Provide large numbers of "choke points" and all energy is spend overcoming them

This model does not scale up. It only worked when there was a tiny middle class and a large village population who followed their age old rituals and practices.  Now things are changing, everyone wants a piece of the action. But this model of governing is not changing.  This I think is why government efficiency seems to be declining.

Reform will be difficult. For starters we need to get rid of the IAS, its unsuited for modern day conditions.  But this lobby is entrenched.

Mistake in my prevous post

"the beneficiaries of Nehruvian socialism model only went to a few."

that should read:

Only a few were beneficiaries of Nehruvian socialism model

M K Saini

IITs may be in the limelight, but these are not the only beneficiaries.

All universities and colleges got funding and support from the governments. A doctor graduated from a state medical college, a BA in History school teacher, a B Tech from a state/regional engineering college, a BSc graduate working as a chemist - all are beneficiaries, although the amount of financial support varied.

@Narendra

I fully agree with what you say on the outrageous "reservation  policy" for so-called backward classes entrenched in the system ever since Ambedkar formulated it and further accentuated by VP Singh's Mondal Commission. In fact it is so ridiculous that I know two cases where people have changed their surnames to "qualify" as scheduled class to get jobs. There is large scale corruption in practice in this area. This is pulling the country down not only economy factors wise, but in all respects.  There has been growing resentment in the society about this reservation and hopefully one day there will be backlash to abolish it. Of course, some of us living overseas fail to see the full impact of that reservation factor on the nation to its detriment.

Regarding voting pattern, there is the grass root, or micro-level, aspect no doubt where people vote for their caste party.  But at the macro-level, that is in the large scale picture, governments are changing in India in a democratic way. If there is an election called now, Congress will lose power in the center. In WB the CPM was dealt a crushing blow recently. Even in the past as I noted Congress lost under Indira Gandhi and Morarji & Co came to hold office.  And only when Morarji Co messed up the country Congress was elected back again in 1980s and so on.  Thus I am optimistic in the long run that someting good will emerge after trial and error for a better political class to rule.

There is always that distinction between the micro and macro level analysis in economics or politics.  I hold the view that in the overall picture the Indian society has made great strides "economically" to uplift their standard of living over the years in contrast to India's neighbours. I am not an economist, but that is what I see as a layman.  

The scolarly analysis presented in this column has not taken into account the background factors relevant for such a conclusion. Scientifically and technologically, India is far ahead of all her neighbours. To repeat, even if a fraction of India's military expenditure going on could have been channeled into building hospitals, schools, sanitation, water supply etc etc in the country side, it would have triggered a far better standard of life for the population at large.  The economists do not run the economy of a modern industrialised nation. It is run by the technologists and engineers on one side and by the farmers on the other side. The economists play a background and limited role in this context - they devise fiscal policies of a nation, such as the interest rates set by the reserve banks, budget papers, money circulation etc.

The Nehruvian planning in the past wrongly fell in the hands of the economists of the nation. The technologists and farmers were relegated to a secondary role to contibute for the nation. That is why it did not bring the "honey to flow" as Nehru said in his speech on an independence day ceremony. That is why the Nehruvian planning was a failure economically in the past. But forced to fight wars, India has learned the hard way how to run the economy  after long struggle. I am positive that in a decade's time, if such an economic analysis as presented here is undertaken again, all these numbers will show differently giving a entirely different perspective of the Indian nation in contrast to her neighbours.

Narendra what you proposed is technically doable but more complex with more people involved. So again I believe a recipe for more corruption. I am personally not in favor of yet another ID. To be honest I don't think the current one ID per Indian (Aadhar) is that great an idea. I think it will be more misused that used, including by the government itself. The reason a social security number works in countries like US is there is a long history of privacy laws, laws actually work and violations result is quick redressal including by the courts. We may have laws but given the state of our police and judiciary they just don't work. Most of us don't think of taking help of the police or the courts until and unless left with just no other choice because we know it is more hassle than worth it.

Alternatively, Charitable donations already come with tax benefits. Education institutions and hospitals can also get themselves registered if they truly do provide services to the "poor". This will suffer from corruption too but about the same level as today. It will at least not increase. I am very weary of more items for tax rebate and more laws because it will just be recipe for more corruption in our present state.

Whole of the data for other south Indian economis other than India is bogus. Even Indian information is not correct. But the information for bangladesh, nepal doesnot even exist.


Whole of analysis is based on false analysis. Bangladesh dont know how many bicycle or fans or radios are sold. This type of econmics is just a stick to beat opponents who hold a different view.

Sorry read south Asia instead of south Indian

@Ramakrishnan2

Whole of the data for other south Indian economis other than India is bogus. Even Indian information is not correct. But the information for bangladesh, nepal doesnot even exist.

Whole of the data for other south Indian economis other than India is bogus. Even Indian information is not correct. But the information for bangladesh, nepal doesnot even exist.

I would agree -  and comparing India with Bhutan is unscientific. Pakistan doesn't have an accurate count of its population and its latest attempt to do a census is turning into open warfare.

Indian statistics are based on small sample sizes and scaled up with a whole lot of assumptions. Some may be true, some not. Some are imported.

@DC

All universities and colleges got funding and support from the governments. A doctor graduated from a state medical college, a BA in History school teacher, a B Tech from a state/regional engineering college, a BSc graduate working as a chemist - all are beneficiaries, although the amount of financial support varied.

that may amount to a few million people. The Indian educational system was alway known to be lopsided.  But even today we don't have 100% literacy. Even the Chinese Commies achieved 100% literacy. The Nehru Congress model was designed to keep the majority illiterate and have a tiny educated class

What kind of economists are these gents? They havent mentioned anything on the need to control the burgeoning population of India. Even if one was to implement the steps mentioned by them, where is it all going to end, if the population exceeds the resource allocations?

Thanks MK Saini.,

The paper is based on information which is blatantly false. Indias statistical department is so unreliable that GDP figures are doubtful. if you want to assess real info then check associations like automobile, cement, electricity, consumer goods production data. Econometrics is part of official unreliability.

It is true that tribal areas remain extremely poor but if they want to continue with their old ways then things wont change. But instead of trusting the data used by Sen it is better to compare key indicators like production of cement, steel, two wheelers, TV, Mobile, food, milk etc. The consumer items reflect surpluses in households.Bank deposits or land prices can also give good idea.

I think I will do some research and will come back with detailed response.

I wonder why these types of studies are done and who funds them?
How they get data from different countries? Most of these countries don’t even collect enough data, so how do they draw different conclusions? May be finally they will show that situation improved after implementation of some programs financed by IMF, World Bank or some useless UN agency.
Majority of these celebrity economists are from rich and developed countries, they have won numerous noble prizes in Economy, they have written millions of books about economy still their big economic houses are crumbling, why?
These highly intelligent Economists were not able to see Tsunami of economic recession and economic slowdown, what are the reasons? But they keep writing how others should manage their economy, don't you find it suspicious?
For me, either they are not big economists or their country is not in recession (same like one can’t claim to have best health facilities with best medical doctors and still having epidemics all around in the country)
Hope India won’t take advices from these failed economists.
 

An insightful article much needed in a country where many in the middle and upper classes of society seem to suffer from an inability to critique the "shining India" tripe espoused by much of the corporate world and their acolytes in the state and mainstream media. Couple of thoughts. One, with respect to the comparisons drawn out with China’s efforts to foster inclusive development, I would argue that, even the Chinese state, despite its higher economic growth rates and more successful social policies, is battling problems of endemic inequalities between the burgeoning urban middle class and the poor from rural/remote areas who migrate to urban centres providing cheap labour for export-driven factories. The phenomenon of migration is a huge feature of India’s uneven growth story too, but I did not find the scholars make a mention of it in this article.
There may be huge employment opportunities available in our cities for the skilled as well as unskilled rural populace as a result of two decades of economic liberalization that bore witness to promotion of Special Economic Zones, Industrial Parks and Mega Cities by both centre and various state governments.Unfortunately, the governments and industry seem to have created those opportunities at the unfair price of measly wages and near deprivation for a vast majority of our rural migrants, who live under precarious conditions in our cities without access to quality housing, sanitation and health facilities, not to mention the struggles they undergo bargaining for a decent wage that guarantees meagre savings. Inclusive development policies, therefore, among other objectives, would need to address structural inequalities in the economy that are causing large-scale migrations and would require a steadfast focus on encouraging an equitable and sustainable agrarian economy in the rural areas.

 India has a strong position if all economic indicators are compared

Economy at a Glance: http://knoema.com/yxjlccc#India

Per capital Government Debt: http://knoema.com/zeczygg#India

I think I will do some research and will come back with detailed response.

Ramakrishnan2
NY, United States
 

You often post to expose your enormous ignorance blended with unfathomable arrogance. Every country including India puts institiutional effort and resources to collect economic data in a reliable manner. ( Data gathering and interpretation is backbone of policy planning I hope you know). Statistical methodologies are being used for decades in data interpretation.sample surveys are conducted by the government, private institutions and academics. Their methodologies are discusssed and refined. There are thousands of competent professionals in government and reputed private organizations who research on this. It is not difficult to know the sources of information, the data gathering process and the methodologies. However, if the findings contradict to what you wish these should be, you choose to trash the research, the professionals who conduct them and the academics who cite them. Is it an educated opinion in the first place? I already objected to your ridiculous idea of Harvard and offending comments about Sen. But with the comments like above I doubt your mental maturity.

M.K Sani

 It's  fashionable to trash Nehru these days for everything without knowing the historical context. If I defend Nehru for some of his policies , I do not necessarily endorse all policies that Congress follows or have followed. It will be wrong if you refuse to acknowledge the beneficial impact of subsidized higher education that gave social mobility to millions who formed the Indian middle class. (Nehru's fault of not doing enough for the primary education as you rightly pointed out is well documented. Illiteracy especially in the rural area is still attributed to the faulty primary education policies taken after independence,)  Nehru's dream of industrial growth driven by the public sector companies didn't come true. Except for a handful of corporations most of the public sector enterprises were/are inefficient and incurred huge losses to the taxpayers' money. Yet the same public sector institutions also provided the middle class livelihood for lakhs of people working there. We can't ignore that as well.

I do not defend a prolonged socialistic policy, but would always argue that things were not as simple in those days and many of the failed initiatives also helped build foundation of a non-extant middle class. Driving out our ghost of socialism started in the Congress era and the same path of market based reforms was followed during the NDA and UPA rule. I don't see any major differences in the economic thinking of Congress and BJP at this point.

Narendra

Caste based reservation in educational institutions is nothing new and has been continuing for two generations now. It's become more painful for the general candidates in recent years as the proportion of quota doubled. It's frustrating but all of us had to go through stiff competition due to limited availbility of seats in good colleges coupled with further limitation of general seats in a quota regime. Although number of seats has gone up over the years, so also did population of young Indians. But this should not be justification for any meritorious student to trash all state sponsored academic institutions.

I agree with you on the resource crunch in Indian state funded colleges. However, I also hold  low opinion of the quality of education in privately funded colleges post liberalization. If the state colleges are suffering from the shortage of resources then private colleges are suffering because most of them are money making schemes of politicians and they seldom spend on quality resources. There is dearth of good teachers everywhere. Also private colleges tend to concentrate on education in professional courses like engineering. Except for Indian School of Business we are yet to see formidable challenge from private colleges to noted state institutions.

You may spend a lot of money to private college of your choice. (Your college would have charged you a lot more in the absense of the government  support for academic institurions in land acquisition etc.).It'll be wrong to assume that others from less affluent families can afford the fees. They need lower priced public colleges. (Availability of bank loans for higher priced education is over-rated. Banks lend based on their assessment of employment opportunities of the student post education and not because of any philanthropic reason.) 

Private initiatives and government efforts go hand in hand -they can complement but can't replace each other.

 A good insight by the world renowned Economist.

To put growth in its place, we need to put in place the following things:

- Proper grass root level administration

- A balanced budget every year (both Union and States)

- Expedite pending cases in courts. Disputed wealth would be back to use.

- Re-look and re-formulate India's master plan

- Put to best use, the available natural resources

These are the areas that can be looked at and ensuring this means that growth will follow.

It seems that the data on which Mr.Amartya Sen based his opinions and research may be  at least 5 year old as has been pointed out already by someone.

It is true that a lot has to be done for health care and education , that is ., increased revenues accrued to the Govt. due to high growth rate of economy, has to be directed to develop in these areas. But the responsibility to spend judiciously and arrest corrupt practices lies with States ,obviously there are a few corrupt ,rogue states and they were far behind other states in India in education and health care. The worst one of them is Bihar.

This is same,  may be with any country.

Japan ,when it started developing , its Nikkei index went from 650 to 24000. But only 10% of population , perticularly middle class  became super rich tycoons while rest of the populations ended up as emplyees working for them  leaving beghind 2% population extremely poor.

The country perticularly when it is a democratic county it can only provide more opportunities for the youth and other hardworking people to grow.  Democracy has got its limitations.

But we indians have a "peaceful" way of living or it is ingrained in our blood. For example when middle class realised that public education system is collaped as far as they are concerned , they "peacefully" and transparently shifted to private education , and the private sector education system bloomed like thousand flowers making even some corporates very which.

For example I went to public system of education , to Govt. schools and colleges for all of my education but I could not even imagine sending my daughters to a govt.school because , I found only dirty rooms, goats,sheep and buffellows along with children from slums and offcourse, the teachers would be conspicously obsent and the building was so old that I feared that it might collapse any time. Who goes to Govt.school in a city like Hyderbad or even in district HQ ?? Let Kapil Sibal tell us.

But middle classes, our intellecutuals , our revolutionaries never questioned it, never took out any public demonstations of their anger or frustrations. They simply,silently shifted to a private schools like me. Then who goes to Mahatma Gandhi hospitals ?

I have a different take on this article -- The numbers show an utter failure of the folks in Cong. who are handling the welfare part -- namely, the useless NAC. The growth centric part of Govt. is delivering and giving ample money and the welfare part of the Govt. (NAC) is an utter failure -- Its high time such group is thrown out! ..

I also claim that the terrible figures are contribution of states where growth hasn't touched, namely the BIMARU whereas other states have improved significantly. The authors should have compared the capitalistic states of Gujarat, South India etc.. vs the socialistic states like Bengal, BIMARU etc. I'm sure the improvement would be significant in the capitalistic states.