Indian Reforms Lopsided: Amartya Sen
India has not chosen the right course for economic reforms since 1991, says Amartya Sen, Lamont professor and professor of economics and philosophy at Harvard University.
Reforms in India have been lopsided as the government has failed to address itself to basic social issues such as education and health care, which may prove a hindrance to the ensuing globalisation process, said Sen while delivering a lecture on India: What prospects? at a function organised by the Confederation of Indian Industry (CII) in the Capital yesterday.
Making use of the sufficient case material at his disposal, Sen said that the course that the reforms took was based on the assumption that an over-active government led to constant interference in the market mechanism.
This does not make for a nice slogan it is neat and tidy and half-true. Like all half-truths, evidence can be offered in defence of this diagnosis. The license-raj did make economic initiatives difficult, produced lots of inefficient industries and led to many allocational distortions, Sen argued.
While an over-active government in the economic sector proved to be counter productive, an under-active government in the social sector bestowed on the country the dubious distinction of having the largest number of poor in the world and also the largest middle-class on earth, he said.
The slogan of over-governance does not match the reality of shocking under-activity in some spheres, with gross over-indulgence in others, he said.
Offering references to the Chinese and South-East Asian models of economic reforms, Sen said their success story would not have been possible had they not addressed the issues of education and health care prior to embarking on economic liberalisation.
India will, therefore, find it difficult to cope with the process of globalisation, inevitable now, because of its vast army of illiterates, dispossessed and grossly inadequate health services.
Participation in a globalising world economy requires adherence to the discipline of quality control, production to specification, and informed economic collaboration. People with no schooling with no literacy or numeracy cannot easily cross the barriers to participating gainfully in global economic arrangements. On the other hand, they can lose their jobs and occupations from global competition from countries without Indias self-perpetuated handicaps, he said.
By way of solution, the professor suggested that what is called for is not the preservation of inefficient work arrangements in protected mausoleums, but economic and social policies that work towards absorbing the displaced and de-established in new employment and new economic activities.. the governments forward-looking view, concentrating in particular on economic incentives for job creations and social opportunities for wide participation. Curbing governmental over-activity is not adequate.
However, Sen said that despite Indias handicaps in the social sector, its democracy was one of its greatest assets. He proceeded to reject the thesis that a democracy was a hindrance to speedy economic development the successes of totalitarian regimes in China and South-East Asia notwithstanding.
He said a democracy could not be judged in terms of economic development or any other material benefits accruing from it, but it is important for the intrinsic value it bestows upon citizens in terms of freedom as also its ability to politicise issues concerning the people.
The reforms process has been lopsided with the government failing to address basic social issues like education and health care. This may prove a roadblock to the globalisation process, says Sen, Lamont professor at Harvard