NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Friday, March 25, 2011

The Prime Minister’s focus on double-digit growth is not due to any ’growth mania’. It is for the benefit of the poor.

At a recent function for police officers, the Prime Minister observed: “If we don’t control Naxalism, we have to say goodbye to our country’s ambition to sustain a growth rate of 10 to 11 per cent per annum.”

Some commentators (like Prof Prabhat Patnaik of JNU) interpret this (in a newspaper piece) as the Prime Minister prioritising 10-11 per cent growth over poverty alleviation as a national objective. Prof Amartya Sen, in a different context, has stated in a article (in The Hindu) that it is “silly” to compare India’s growth rate with China’s, without comparing their performances in other spheres such as education and basic health. India should concentrate on improving the quality of life of its people by focusing energy and resources on providing food, shelter, education and health to all, even if that comes at the cost of a lower overall growth rate.

Another group of economists, led by Professors Jagdish Bhagwati and Arvind Panagariya of Columbia University, US, takes a somewhat different line. Their point is that though high growth is certainly not an objective in itself (no serious economist would ever think so), for practical reasons it is the most important means by which poverty can be reduced in a sustained manner.