Indian Development Strategy

Indian Development Strategy T N Srinivasan ASHOK RUDRA (July 25) chides me for not distinguishipg public ownership from public intervention. A distinction without an essential difference is not analytically useful. Without getting into various dimensions of ownership and property rights, let me just say I was implicitly defining an owner as the residual claimant of the net output from an asset. My point was and is simply that, but for the exceptions noted in my earlier article, almost anything that the government can achieve with public ownership it can do by an appropriately chosen set of interventions without ownership. Whether the state has autonomy to intervene in a way that goes against particular interests is certainly an important issue on which there is a vast literature, particularly as it relates to Indian political economy. But a state that cannot intervene to achieve objectives that are against dominant interests is unlikely to be a state that can achieve the same objectives through public ownership brought about either by nationalisation of existing private enterprise or by public investment. I was contrasting alternatives to ownership for a state that can intervene or own or do both in some combination. If its 'class character' precludes intervention of the kind I was talking about, I submit it cannot 'own' either.