Showing posts with label Economy. Show all posts
Showing posts with label Economy. Show all posts

Tuesday, January 22, 2013

Putting growth in its place

A somewhat old but still massively relevant article by Jean Dreze and Amartya Sen in Outlook on India's socio-economic performance since 1990.

The point of the article is that both the "massive success" (GDP growth) and the "massive failure" (poor social outcomes) of Indian economy since 1990 are true. To see the second point, they give stats on India's performance in South Asia (it has deteriorated, relatively, even below Nepal and Bangladesh and is only above Pakistan).

The key point they make is to distinguish between "unaimed opulence" and "growth-mediated development" (as introduced in their 1989 book, Hunger and Public Action, one of the best books I have ever read).

Unaimed opulence (they give the example of Brazil before Lula) is concentrating on economic growth without complementing social programs. It is in large part (they give exceptions in TN for example) what has happenned in India, with an extremely miserly spending on health and education.

Growth-mediated social programs would use the extra revenue generated by high growth (India has 4 times more revenue than 1990) in an active way, as Brazil has done after Lula came to power.

This is not just a theoretical difference, it requires politics of confronting power, like the biscuit lobby in Mid Day Meal program and corporate power in India.

As an aside, the Mid Day Meal program by itself has reduced effective poverty by a significant amount, so it is important to preserve it.

The whole article is worth a read.

Sunday, January 13, 2013

Officials hope that social and infrastructure spending is lower

This is literally true. In an article upbeat on meeting the fiscal deficit target of 5.3%, there is a line saying that

"Besides, officials said, hopes are high about huge savings on the Plan expenditure front, where a number of departments and other ministries have not been able to utilize allocations for social and infrastructure sectors" 

Not utilizing allocations on social and infrastructure sectors is a good thing? Even the business leaders and respected economic commentators (quoting the RBI) identify infrastructure as a key focus area.

Not to mention that social sectors require a lot of attention in India with spending on health and education among the lowest in the world as a percentage of GDP.

This is a case of deficit-fetishism. Fiscal deficit is not an end in itself. There is nothing good in this story.

Tuesday, September 11, 2007

Latest ILO report

The latest ILO report on labour is out.

Interestingly, but not too surprisingly, there was a piece in the HT "Economy" section, which only mentioned the productivity part, but didn't mention the hours worked/day or the "Substantial decent work deficits" section. Guess that's too irrelevant to our economy.