Recently the clash of the two giants from the world of academic economics Amartya Sen and Jagdish Bhagwati which was triggered by the review of Sen's new book- AN UNCERTAIN GLORY: INDIA AND IT'S CONTRADICTIONS has provided me an impetus to write this article while introspecting about the inner meanings of growth and development.
I was going through the reviews about this book but none of them were satisfactory. Most of them offered a one sided view . In economics like most other subjects of humanities there are no straight forward answers like a complete yes or complete no.
Before engaging ourselves with the main theme of growth and development let us try to understand growth and development in a simple manner.
Progress , growth and development .We come across these three terms in most of the newspaper articles. The major problem with newspaper articles and economic survey and most of the government reports is that they assume that the reader has full knowledge about economics.
Progress is a general term that denotes improvement in anything.
Growth in economics means an increase in economic variables over a period of time.Most important aspect of growth is quantifiability. i.e. it can be measured in absolute terms.
Examples : food grain production in tonnes, road network in kms, GDP of a country etc.
Economic growth is quantitative progress.Economic growth is widely used term in policy making , economic analyses and also for comparing economies.
Till 1950s economists failed to distinguish between growth and development though they knew the difference between these terms.During 1960s in many countries growth was higher but the quality of life was lower.This resulted in defining economic development different from economic growth.
Development indicates the quality of life which might be seen in accordance with the availability of many variables such as level of nutrition,healthcare facilities,level of education etc.
If the people are to be guaranteed a minimum level of quality of life by providing above mentioned inputs , a minimum level of income has to be guaranteed for them.Income is generated from productive activities. It means before assuring development we need to assure growth,And higher economic development requires higher economic growth. But it does not mean that a higher economic growth automatically brings in higher economic development.
Lets say for example two persons having same levels of income but spending differing amounts of money on development.The first person might be giving little attention to health ,education and going for saving while the second person might not be saving but takes possible care of health and education.Here the second person necessarily will have higher development in comparison to first person.
If economic growth is suitably used for the development it comes back to accelerate the growth and ultimately greater and greater population brought under the arena of development.Similarly high growth with low development and ill cared development finally results into fall in growth.
Now let us consider our economic experts take on growth and development. Sen believes that India should invest more in its social infrastructure to boost the productivity of its people and thereby raise growth, Bhagwati argues that only a focus on growth can yield enough resources for investing in social sector schemes. Investing in health and education to improve human capabilities is central to Sen’s scheme of things. Without such investments, inequality will widen and the growth process itself will falter, Sen believes. Bhagwati argues that growth may raise inequality initially but sustained growth will eventually raise enough resources for the state to redistribute and mitigate the effects of the initial inequality.
We often hear of demographic dividend and its benefits that will accrue to our nation in the coming decades. But if we turn a blind eye to development aspects like health and education it will be dangerous to our economy.Demographic dividend occurs when majority of the population is of working age and can contribute to the country's economy.When the majority of our population is educated and healthy only then it will result into a dividend.But our government spends very less on health and education fronts.
In India, around 46 per cent of all children below the age of three are too small for their age, 47 per cent are underweight and at least 16 per cent are wasted. Many of these children are severely malnourished.
Given its impact on health, education and economic productivity, persistent under-nutrition is a major obstacle to human development, impacting India’s much-awaited demographic dividend and the country’s prospects for future economic growth.Malnutrition affects children’s chances of survival, increases their susceptibility to illness, reduces their ability to learn, increases their chances of dropping out early from school, and makes them less productive in later life. Much of this undernourishment happens during pregnancy and in the first two years of a child’s life and without appropriate interventions, the damage to brain development and future economic productivity is largely irreversible.
India has a serious “infrastructure problem” in education as it does with roads, ports, public transportation, electricity, and so on. long-term inadequate spending and poor planning will catch up with India's booming economy at some point. In terms of human resource, it is not enough to have lots of young people — these young people need to be properly educated to fully contribute to the new economy. In order to reap the benefits of demographic dividend our government should create sufficient opportunities for the aspiring young Indians who will be the drivers of India growth story.
GROWTH AND DEVELOPMENT are complementary to each other. According to our socio economic conditions we need to have a right mix of efforts that lead to growth as well as development in the long run.There is no point in quibbling over which one is important .
Finally a balanced view of growth and development should be a more intelligent strategy that our policy makers need to adopt .
I was going through the reviews about this book but none of them were satisfactory. Most of them offered a one sided view . In economics like most other subjects of humanities there are no straight forward answers like a complete yes or complete no.
Before engaging ourselves with the main theme of growth and development let us try to understand growth and development in a simple manner.
Progress , growth and development .We come across these three terms in most of the newspaper articles. The major problem with newspaper articles and economic survey and most of the government reports is that they assume that the reader has full knowledge about economics.
Progress is a general term that denotes improvement in anything.
Growth in economics means an increase in economic variables over a period of time.Most important aspect of growth is quantifiability. i.e. it can be measured in absolute terms.
Examples : food grain production in tonnes, road network in kms, GDP of a country etc.
Economic growth is quantitative progress.Economic growth is widely used term in policy making , economic analyses and also for comparing economies.
Till 1950s economists failed to distinguish between growth and development though they knew the difference between these terms.During 1960s in many countries growth was higher but the quality of life was lower.This resulted in defining economic development different from economic growth.
Development indicates the quality of life which might be seen in accordance with the availability of many variables such as level of nutrition,healthcare facilities,level of education etc.
If the people are to be guaranteed a minimum level of quality of life by providing above mentioned inputs , a minimum level of income has to be guaranteed for them.Income is generated from productive activities. It means before assuring development we need to assure growth,And higher economic development requires higher economic growth. But it does not mean that a higher economic growth automatically brings in higher economic development.
Lets say for example two persons having same levels of income but spending differing amounts of money on development.The first person might be giving little attention to health ,education and going for saving while the second person might not be saving but takes possible care of health and education.Here the second person necessarily will have higher development in comparison to first person.
If economic growth is suitably used for the development it comes back to accelerate the growth and ultimately greater and greater population brought under the arena of development.Similarly high growth with low development and ill cared development finally results into fall in growth.
Now let us consider our economic experts take on growth and development. Sen believes that India should invest more in its social infrastructure to boost the productivity of its people and thereby raise growth, Bhagwati argues that only a focus on growth can yield enough resources for investing in social sector schemes. Investing in health and education to improve human capabilities is central to Sen’s scheme of things. Without such investments, inequality will widen and the growth process itself will falter, Sen believes. Bhagwati argues that growth may raise inequality initially but sustained growth will eventually raise enough resources for the state to redistribute and mitigate the effects of the initial inequality.
We often hear of demographic dividend and its benefits that will accrue to our nation in the coming decades. But if we turn a blind eye to development aspects like health and education it will be dangerous to our economy.Demographic dividend occurs when majority of the population is of working age and can contribute to the country's economy.When the majority of our population is educated and healthy only then it will result into a dividend.But our government spends very less on health and education fronts.
In India, around 46 per cent of all children below the age of three are too small for their age, 47 per cent are underweight and at least 16 per cent are wasted. Many of these children are severely malnourished.
Given its impact on health, education and economic productivity, persistent under-nutrition is a major obstacle to human development, impacting India’s much-awaited demographic dividend and the country’s prospects for future economic growth.Malnutrition affects children’s chances of survival, increases their susceptibility to illness, reduces their ability to learn, increases their chances of dropping out early from school, and makes them less productive in later life. Much of this undernourishment happens during pregnancy and in the first two years of a child’s life and without appropriate interventions, the damage to brain development and future economic productivity is largely irreversible.
India has a serious “infrastructure problem” in education as it does with roads, ports, public transportation, electricity, and so on. long-term inadequate spending and poor planning will catch up with India's booming economy at some point. In terms of human resource, it is not enough to have lots of young people — these young people need to be properly educated to fully contribute to the new economy. In order to reap the benefits of demographic dividend our government should create sufficient opportunities for the aspiring young Indians who will be the drivers of India growth story.
GROWTH AND DEVELOPMENT are complementary to each other. According to our socio economic conditions we need to have a right mix of efforts that lead to growth as well as development in the long run.There is no point in quibbling over which one is important .
Finally a balanced view of growth and development should be a more intelligent strategy that our policy makers need to adopt .
Well written & informative.
ReplyDeleteTechnically, higher growth has to produce development and it does, but, the million dollar question is for whom??? This is where balanced distribution of fruits of growth i.e development comes into the picture.
This can be done through direct actions that is taking from the haves and giving to the have nots- i.e handouts,DBT.
Or indirectly, Like providing livelihood opportunities.Well, without skills no sustainable source of livelihood is possible.
It is this aspect, I believe ,Dr Sen is stressing on.Provide good education and health,so that we can reap its benefit in future as demographic dividend.
Whereas Jagadish Bagawati probably is advocate of trickle down theory.However, atleast in India, trickling of benefits has not happened.Hence, we have concept of Inclusive development.
Lastly, the 12th FYP has allocated more resources for heath and education than the previous plans, which is a positive sign.However, implementation is an uphill task.The concept of social mobilisers, community colleges, skill development council,atleast one vocational school in each TSP districts,scholarships,hostels & residential schools for SC students are all envisaged to include our marginalized sections into the ambit of growth and to embrace its developmental benefits.
Thank you for reading my post.
ReplyDeleteMost of our policymakers are obsessed with growth figures but they don't see the real picture.
Actually i am not happy with the reviewers comment that Dr. sen is going to pre 1991 era of license raj. They are projecting him in a wrong manner . He was never against growth but he is worried about millions of people who do not have basic facilities of food and shelter. With out having a minimum competence on the subject of economics some people are writing reviews .You know its the number one book on sales list in flipkart right now.
I am not a great follower of either of the great economists you mentioned above but i do have a general opinion. I agree with Dr. Sen's ideology. I am not sure if Mr. Bagawati has considered the fact that redistribution of resources/wealth isn't practically possible, even if it is carried out by STATE!. At the least the state cannot do it right now, what can it do in future.
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