ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Growth, Poverty and Reforms

This is regarding Jagdish Bhagwati’s address to the Punjab University (‘Growth, Poverty and Reforms’, EPW, March 10). University convocations are not just celebratory occasions; they are, as the Americans say, commencements – the start of a young person’s active participation in society’s multiple processes. It is therefore meet that at that stage young men and women passing out of the universities are invited to join the public debate on national policies. Bhagwati extends such an invitation with elan.

So far so good. From then on, Bhagwati’s address becomes a grand sales talk – how everything done until the 1980s was wrong-headed, condemning the country to the Hindu growth rate of 3.5 per cent per annum; and how after the policy changes spearheaded by Manmohan Singh the growth rate has shot up spectacularly. In the process, he sets up several straw-men to knock them down. Contrary to what he says, those who criticised the Planning Commission (especially after 1970) for not paying adequate attention to poverty alleviation were not objecting to the growth objective as such; they were actually saying that it was not a sufficient condition. Critics of the reforms programme also say the same thing; growth is a necessary but not a sufficient condition for poverty alleviation. Now, Bhagwati does not say anything different. He recognises that growth can bypass, even hurt, certain groups including the poor. “But the answer again is not to oppose growth but to use an appropriate policy of diversification that, in tandem with the growth policy, ensures that immiseration does not occur.” What exactly are these ‘appropriate’ policies which do not involve at the margin some trade-off with the growth rate? Who is to formulate and administer such policies? Where exactly does the state figure in all this? It would have been better for Bhagwati to have spent more time on these supplemental policies instead of asserting over and over again how the anti-market, anti-globalisation, pro-public sector and pro-massive regulation policies of the past had ruined the country.

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