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Some Basic Issues Underlying Basic Income

As India gears up for another general election, the politics of poverty eradication has again gained centre-stage; and there has been a great deal of

Some Views on Public Policy Outcomes in India - Is it the Message or the Messenger?

How has India been doing on the economic and social fronts? The picture that emerges—from casual empiricism as much as from careful analysis of facts

Arvind Lecture1
Cooperative and Competitive Federalism to Foster Reform: The Case of the Power Sector (Video, Audio, and Full Text)

The video, audio, and full text of the lecture, Cooperative and Competitive Federalism to Foster Reform: The Case of the Power Sector, deilvered by th

Bhagwati contra Sen: an assessment

S. Subramanian It is a perfectly defensible intellectual position to turn one’s back on the Sen-Bhagwati dispute and have nothing to do with it. However, if one chose to assess the nature and significance of the difference, then I’m not sure that it is accurate to characterise the dispute as one in which there wasn’t, after all, and at bottom, much of a difference in the positions of Bhagwati and Sen, and that, in the end, it was just a matter of relatively mildly differing emphases in their respective points of view. To see what is involved, it is useful to ask what are the respective salient claims of Sen and Bhagwati that seem to have featured in the controversy involving the two economists and their respective supporters, and to ask also how exceptionable or otherwise these claims have been. On Sen’s side, it would appear that the following claims have been important aspects of his perspective on India’s development: (a) that ‘fetishizing’ growth for its own sake is unproductive; (b) that enhancing human capabilities, especially in the matter of improving people’s status with respect to poverty, inequality, health and education continues to be a priority item on India’s development agenda; (c) that the State has an active interventionist role to play in securing these aspects of human capability for its citizens; (d) that Kerala, Sri Lanka, Cuba and Costa Rica are examples of important sites in which public action, rather than growth in per capita income as such, has played an important role in human development; (e) that nutrition, education and health are vital inputs into the growth process, and wide-spread country evidence suggests this rather than that one has to wait for growth to happen before one can think of improving peoples’ standard of living; and (f) that democracy is important, both intrinsically and instrumentally, for human development. I find it difficult to quarrel with any of these propositions. It could be held, of course, that the claims are somewhat trite, but it is hard to question their relevance or their rightness when the objective circumstances triggering their articulation have changed so little as to warrant silence on the subject. Of the salient claims made by Bhagwati and Co., one is that poverty has been well-served by growth in India. I believe it is right to entertain some doubt on two matters associated with such a claim: (i) has the reduction in money-metric poverty, based on the dubious official methodology of identifying the poverty line resorted to by both the 1993 Planning Commission Expert Group and the 2009 Tendulkar Committee, really been as dramatic as the official statistics suggest?; and (ii) even if there has been some reduction in money-metric poverty, how can it all be attributed to growth and not also to direct anti-poverty State policy? Additionally, whether we speak of money-metric poverty, or multidimensional deprivation, are current levels of privation acceptable with respect to their absolute magnitude, and in relation to either India’s potential for poverty-reduction or the achievements of countries that started at comparable levels of under-development? A second major claim [by Bhagwati & Co.] is that growth in India has not been seriously inequality-increasing. Trends in the evolution of interpersonal inequality in the distribution of both consumption expenditure and household assets, however, suggest an over-time increase if inequality is measured in terms of a ‘centrist’ index rather than a purely relative or ‘rightist’ index of inequality. One supposes one can have a debate on how serious widening economic inequality is (both morally/politically and for its effects on efficiency, public health, and conflict), but it is altogether another matter to pre-empt such debate by altogether denying a rising trend of inequality. In short, in the Bhagwati-Sen debate, a responsible assessment would seem to suggest that (1) there is a genuine difference of opinion between the two camps; (2) there is more reason to question the claims of the Bhagwati than of the Sen camp; and (3) the dispute has been really rather one-sided: it is worth noting that it is Bhagwati who has accused Sen of paying lip-service to growth, not Sen who has accused Bhagwati of paying lip-service to poverty (or anything else, for that matter). I feel it would be right to see the dispute as reflecting differing views of economics and politics: the media is perhaps justified in seeing the matter in these terms, though there is little to be said for sensationalizing the debate in the terms of a Clash of the Titans, and such gossip-value as is to be extracted from such a construction. S. Subramanian is Professor, Madras Institute of Development Studies, and the author of The Poverty Line (2012: Oxford University Press, Delhi ). E-mail:  [email protected]