ET2002 ⁽¹⁵⁾

“The poor are a gold mine,” wrote economist Thomas Sowell two decades ago, arguing that often anti-poverty programmes benefit those who administer them rather than those for whom they are administered. India’s food procurement, storage and distribution system lends unequivocal support to Sowell's contention: Out of every Rs. 100 spent on food subsidy in India, only Rs. 3.70 reached the poor in the year 2000-01."The poor are a gold mine," wrote economist Thomas Sowell two decades ago, arguing that often anti-poverty programmes benefit those who administer them rather than those for whom they are administered. Read full article Abstract: "The poor are a gold mine," wrote economist Thomas Sowell two decades ago, arguing that often anti-poverty programmes benefit those who administer them rather than those for whom they are administered. Sowell went on to suggest that the US spending on anti-poverty programmes at the time was three times that needed to lift every man, woman, and child in America above the poverty line by simply sending money to the poor. Considering Sowell's impeccable credentials as a conservative economist, it is tempting to…

Those of you old enough to remember Mother India, the first Indian film to be nominated for an Oscar, would remember its hero Sunil Dutt sitting on top of a mound of grain and trying to keep the villain from taking it away. Well, gone are the days. We now have the Food Corporation of India sitting on top of a mountain of grain, trying to keep the rains from washing it away. How did we arrive here? What should be done? Economic Times, Wednesday, March 27, 2002 WHEN I first read about the European “Butter Mountain” back in the 1970s, I thought this was possible only in the rich countries. But only a quarter century later, through excessive hikes in support-cum-procurement prices, we have created our own “Foodgrain Mountain” containing 62 million tonnes of wheat and rice. Today, granaries of the Food Corporation of India are literally overflowing, with almost half of the grain stored in the open, ready to be washed away by rain. According to a World Bank report, of the total stock held by FCI, 50…

Because of its large and growing population, the threat of “employment problem” is never far from the minds of policymakers in India. Yet, there are good reasons for the ambivalence of economists towards such a threat. The old saying that the child is born not just with a mouth to eat but also two hands to work carries much wisdom. Economic Times, 26 February 2002 ECONOMISTS, with the possible exception of macroeconomists, are ill at ease when asked to pronounce on aggregate employment in the economy. This was driven home to me many years ago when, during a talk by T N Srinivasan of Yale University, I happened to ask what the implications of his model were for employment. “If your question is about the impact on employment in a particular sector,” TN responded, “I can answer it. But if it is about economy-wide employment, I am afraid it falls in the realm of macroeconomics, which I regard as non-economics.” Therefore, when the Planning Commission decided to appoint a Task Force on Employment Opportunities in January1999 with the charge to…

Last year, in what was a truly historic budget, Finance Minister Yashwant Sinha had announced several major reforms. But the Vajpayee government utterly failed to deliver on them. The forthcoming budget must offer credible commitment to undo this failure. Economic Times, January 30, 2002 Capitalizing on the popular support he received for the determined military intervention following the 9-11 attacks, U.S. President George Bush has gone on to take a bold initiative on the economic front: he has made concessions that were unthinkable two years ago at Seattle and successfully launched a new round of trade negotiations. Prime Minister Atal Bihari Vajpayee has responded with a similar resolve to the 12-13 attacks on the Indian Parliament and received popular acclaim for it. And he, too, may now want to capitalize on this popularity by taking bold initiatives on the economic front in the forthcoming budget. India’s reform program has come to a standstill in the current year and there is unlikely to be a better opportunity to jumpstart it. Last year, in what was a truly historic budget, Finance Minister Yashwant Sinha had announced…

The Economic Times invited three economists (Jagdish Bhagwati of Columbia University, Kaushik Basu of Cornell University and Arvind Panagariya of the University of Maryland) and two industrialists (Azim Premji of Wipro and R. Seshasayee of Ashok Leyland) to address five questions relating to the economy, wish-list for 2002, public-private partnership, public morality and future for India. India in the Year 2002: New Year's Day Special Economic Times invited three economists (Jagdish Bhagwati of Columbia University, Kaushik Basu of Cornell University and Arvind Panagariya of the University of Maryland) and two industrialists (Azim Premji of Wipro and R. Seshasayee of Ashok Leyland) to address the following five questions: 1) What is your assessment of the state of the Indian economy today? 2) What is your wish-list for the coming year? 3) What kind of public-private partnership do you think is most suited to India? 4) Are falling standards in public life affecting our economic performance; if yes, what is the remedy? 5) Is there a future for a society like ours that seems to be getting more and more polarized with each…