In The Media ⁽⁴⁰⁰⁾

Read full article (pdf) (Op-ed, August 3, 2004) Thanks to the advocacy of a few pressure groups and many international institutions, there is now a near-universal agreement that developed country subsidies and protection in agriculture hurt the poorest, least developed countries. This is a telling example of how political correctness can lead to the acceptance of an economically incorrect proposition.

The view that the reforms since 1991 — whether implemented by the Congress, United Front or NDA — neglected the poor, agriculture and education has gained near universal currency inside the UPA government. Even the reformists within the government have publicly complained that the policies pursued during the 1990s lacked the human face. This ‘demonisation’ of reforms not only distorts facts, it also endangers growth that is essential for poverty alleviation.The view that the reforms since 1991 — whether implemented by the Congress, United Front or NDA — neglected the poor, agriculture and education has gained near universal currency inside the UPA government. Even the reformists within the government have publicly complained that the policies pursued during the 1990s lacked the human face. This ‘demonisation’ of reforms not only distorts facts, it also endangers growth that is essential for poverty alleviation. The claims that the reforms short-changed the poor are pure nonsense. During the first three decades of development ending in the early 1980s, the proportion of the population living below the poverty line remained stubbornly unchanged. Because the total…

The key question while assessing the first United Progressive Alliance (UPA) budget is whether it indicates that the progressive, pro-reform wing of the Congress—which the prime minister and the finance minister represent—remains truly in charge of policy. The answer to this question is a qualified and cautious yes. Read full article Abstract: For those keen on reforms, the strategic position the Left parties occupy in the United Progressive Alliance has been of great concern. The reformists' greatest fear is that it will embolden the anti-reform lobbies within the Congress and the bureaucracy that had been forced into oblivion by the wave of reforms in 1991. Many of the initiatives originating in various branches of the government in the last month, which came on the heels of an ill-conceived Common Minimum Programme (CMP), have served to give substance to that fear. Therefore, the key question while assessing the first UPA budget is whether it indicates that the progressive, pro-reform wing of the Congress—which the prime minister and the finance minister represent—remains truly in charge of policy. The answer to this question…

Some of the most important reforms have been shelved and many bad policy proposals are being floated in the name of reform, dimming the prospects for double-digit growth under the present government. According to an old joke, Indian economists are divided into two types: pessimists and optimists. The pessimist says that there is so much wrong with the Indian economy that he cannot imagine it getting any worse and the optimist says he can. The changes in the past fifteen years have, of course, relegated this joke to history. We now only argue about whether India can push the current growth rate of 5 to 6% significantly up. Speaking on behalf of the optimists, I have argued for some time that a double-digit growth is well within India’s grasp. India still remains well inside its true production possibilities’ frontier, which makes further acceleration of the growth rate a perfectly feasible task. Sceptics might say that this is not possible without a major increase in the savings rate but the savings rate is itself known to rise with rising incomes. Viewed…

It is nonsense to pin the anti-NDA vote on to the reforms and not anti-incumbency. Read full article Abstract: In less than a week, India has been stunned twice: first by the election results that handed defeat to an extremely successful prime minister and then by Sonia Gandhi who, having toiled for six years to wrest the prime minister's position from A.B. Vajpayee, decided to step aside in favour of a citizen of Indian origin. While Sonia's critics were willing to divide the nation on the issue of her foreign origins, she herself was not. Many commentators have described the NDA government's defeat as the rejection of the economic reforms. This is nonsense. The Congress had not only pioneered the reforms, it has also promised to carry them forward in its poll manifesto. To quote just two key sentences from the manifesto: "The Congress will broaden and deepen economic reforms. The overriding objective will be to attain and sustain year after year a 8-10 per cent rate of economic growth...." Moreover, the results point to a strong anti-incumbency rather than…