FM Endorses Models of Bhagwati and Sen

FM Endorses Models of Bhagwati and Sen

Finance Minister P Chidambaram today invoked growth models advocated by eminent economists Amartya Sen and Jagdish Bhagwati to attack Narendra Modi government's performance in healthcare and stressed the need for combining "passion for growth with compassion for poor".

"As far as growth is concerned, I think we need both the Bhagwati and Sen models," Chidambaram said at an event here.

"India can never be a truly happy, prosperous country unless our passion for growth is combined with compassion for the poor. A large number of people in this country are poor," he said.

Sen's model for growth advocates that India should invest more in its social infrastructure, while the model put forth by Bhagwati argues that mere focus on growth can yield enough resources for investing in social sector schemes.

There is a very fascinating debate between 'growth and equity' going on between two pro-growth economic models suggested by "titans" like Bhagwati and Sen.

"I know there are alternative narratives in politics and that is how politics should be," he said.

Citing the examples of Gujarat and Maharashtra,Chidambaram said, "When we look at the growth rates under the 11th Five Year Plan, Maharashtra was at 8.5 per cent and Gujarat at 9.5 per cent, not a big difference.

"If you look at agricultural growth, then Maharashtra was at 2 per cent and Gujarat at 6.65 per cent. If we look at agri and allied sectors then Maharashtra was at 1.93 per cent and Gujarat at 5.63 per cent," he said.

"Clearly we see Gujarat has an edge over Maharashtra in growth. In growth, we can say Gujarat scores over Maharashtra in GDP, agricultural growth," Chidambaram said.

But, if we look at infant mortality rate (IMR), Gujarat has IMR of 44 per 1,000 in 2010-11, while Maharashtra was 28. Look at the Maternal Mortality Rate(MMR) figures of 2007-09 - 148 in Gujarat and 104 in Maharashtra, he said.

In case of total fertility rate, it was 2.5 per cent in Gujarat and 1.9 in Maharashtra. "If we take immunisation coverage then 94.7 per cent coverage in Gujarat and 99.45 per cent in Maharashtra," he said.

Looking at undernourished children up to age of 3 years in Gujarat they are 41.3 per cent, whereas 32.5 per cent in Maharashtra, Chidambaram said.

"So if you combine compassion for poor with growth, then the scenario changes," he said, adding, "I am not here to politicise so won't say further."

"I am passionate about growth....But I must remind you that the passion for growth must be combined with compassion for the poor," he said.

"A most constructive economic policy is incomplete without the element of compassion...I support Dr Bhagwati's views ... there should be passion for growth and equally support Dr Sen's model which says there should be compassion for the poor," Chidambaram said.

"I think the Bhagwati model will never be complete unless complemented with Sen's model," he said.

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