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

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Lack of Linkages

In the article ‘Understanding Economic Growth in India: A Prerequisite’, Pulapre Balakrishnan and M Parameswaran (epw, July 14) have suggestively used “engine” as a process describing economic growth. As per the article, agriculture served the role of an “engine” in the first phase of economic growth and that role of “engine” is taken over by the services sector. Economic literature seems to be using the notion of an “engine” pulling the economy in its trail.

In the article ‘Understanding Economic Growth in India: A Prerequisite’, Pulapre Balakrishnan and M Parameswaran (epw, July 14) have suggestively used “engine” as a process describing economic growth. As per the article, agriculture served the role of an “engine” in the first phase of economic growth and that role of “engine” is taken over by the services sector. Economic literature seems to be using the notion of an “engine” pulling the economy in its trail. “Engine” used in the physical sciences is an instrument which has a capacity to convert one form of energy into another form of energy, mostly mechanical. In the process, engine generates a capacity to carry along objects which themselves do not have a capacity to move on their own. Engine in a car or a train pulls the rest of the body with an impulse generated by the machine. Transposing this notion of engine in the social sciences has serious limitations. It is common to visualise an economy into three constituent interrelated parts, namely, primary, secondary and tertiary sectors. Each part has its own motion which, through an interdependent or interlinkage network, induces motion in the other parts. Since each part has its own motion, the usage of “engine” as a metaphor needs to be questioned. To wit, the sectors in the Indian economy with a sublime lack of interdependence may be performing as three unrelated engines.

Metaphors apart, there are two major inferences drawn by the authors. The first refers to the overall dynamism in the Indian economy, with each sector presenting breaks in performance and acceleration over time. The second inference relates to change in structure with initially the primary sector performing the role of “engine” and a transition to the tertiary sector performing the role of an “engine”. Methodologically, the latter is a questionable inference as they have a single unified model for the entire period without introducing a break in the model for changes in the structural relations between the parts. At the most one can argue that there is a successive acceleration in the tertiary sector after the initial acceleration generated by an impulse from the primary sector.

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