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Some Observations on Economic Growth in India

Some Observations on Economic Growth in India Pranab Bardhan IN a recent contribution, K N Raj (1984) has made a number of critical comments on,the proceedingr-of the 1983 SSRC conference on the Political Economy of Slow Industrial Growth in India, as summarised in a paper by A Varshny (1984). He has even offered an explanation of the deficiencies of the participants in terms of the fact "that the majority of the participants in the tonference are located abroad and therefore not sufficiently familiar with the wide variety of Indian data and their complexities". As a participant in this conference I find it unfortunate that Raj decided to make detailed comments on the conference only on the basis of an individual's published summary report without bothering to check at what leve of complexity and details the issues were actually discussed. As a result some of his comments are derived purely from misinformed guesses about what went on at the conference. On some, other issues there can obviously be differences of opinion (as.there was plenty of in the conference itself) between him and others, but lack of familiarity with the complexity of Indian data is not the basis of such differences. As a matter of fact some of the participants in the conference discussed Indian data at a much more detailed and disaggregated level than Raj with his superior access and familiarity has presented in the tables in his comment. I shall now briefly touch on some of the substantive issues raised by Raj. Needless to say, it represents only my personal views and I do not want to implicate the other participants. (1) Raj spends some space in trying to demolish the alleged hypothesis of deceleration in the rate of growth of gross domestic product. As the title Of the conference (as well as that and the contents of the paper by Varshney) should have made it clear, this is not what the conference discussed. The focus of the conference was on slow industrial growth. On the basis of disaggregated national accounts data for value added at constant 1970-71 prices for about thirty years, some of the participants showed a statistically significant deceleration in the annual rate of growth in the registered manufacturing sector between the first and the second half of this period. For example, fitting a semi-logarithmic growth equation, this estimated rate fell from about seven per cent in the period from 1956-57 to 1965-66 to about five per cent in the period from 1966-67 to 1981-82. For details see I Ahluwalia (1983) and Bardhan (1984), (This, by the way, is a less unsatisfactory way of analysing the data than dealing with the year-to-year growth rates that Raj presents.) Apart from deceleration in industrial growth rate, the participants in the conference also discussed in some details the relative slowness of the growth rate itself compared to that in some other developing countries and compared to the potential India has.

On a Belated Apologia for Khrushchev and Trotsky

On a Belated Apologia for Khrushchev and Trotsky GPD PARESH CHATTOPADHYAY (PC) seems to be almost self-righteously angry (EPW, October 6, pp 1759-60\ Possibly the reason for his anger is that he has mistaken us for an expert. Let us disabuse him of any such notion. There is something in his first few lines which reads like Frehch, Not being a frequent visitor to developed capitalist" world, we do not quite understand the languages spoken there. We do not know any Russian either. Quite often we are not sure even of our English. We seem to be in PC's view reasonably competent in "mounting a well-deserved attack" (hopefully not without any serious supporting demonstration for our conclusions). He is angry that we should be so terribly wrong on the Soviet Union. PC has tried valiantly, if we might say so, to portray Stalin as the worst villain in human history. It is a pity that an apologia for Trotsky, Khrushchev and other critics of Stalin had to be a belated one.

Financial Mechanism and Economic Growth

Financial Mechanism and Economic Growth R J Mody ASHUTOSH VARSHNEY has presented (EPW September 1) a report of the discussion that took place in a conference held at MIT on the 'Political Economy of Slow Industrial Growth in India'. The focus of the report is on the current debate on deceleration in the industrial growth since the middle of the 1960s. Two mutually reinforcing proximate explanations are given. The first deals with the deceleration in public investment and the second with the rise in capital-output ratios.

Theory, Ideology and Idolatry

Theory, Ideology and Idolatry John Weeks IT is bitter irony that while the social theory of Karl Marx is based upon the view that history develops in response to impersonal forces and not the volutional acts of great men and women,1 the socialist and communist movements of the world haw been characterised by an uncritical reverence of great men, particularly Marx, Engels and Lenin, to the point of religious idolatry. This bizarre tendency which denies the essence of the materialist method is well known: the virtual canonisation of Lenin, then later Stalin in the Soviet Union, the cultlike worship of the aphorisms of Mao Tie-Tung, as well as the uncritical reverence for Mane and Engels. This denial of materialism has moved from the absurd to the grotesque when political considerations have dictated a de-frocking of the canonised, as with Stalin and Mao.

Dual Exchange Rate

(New York; International Publishers, 1970), 2 Lenin's analysis is a textbook guide on how one moves from the abstract to the concrete. See V I Lenin, "The Development of Capitalism in Russia" (Moscow: Progress Publishers, 1972); Volume 3 of "Collected Works".

Indian Development Strategy- Some Comments

Indian Development Strategy Some Comments Jagdish Bhagwati T N Srinivasan SUKHAMOY CHAKRAVARTY'S Fifth G L Mehta Lecture (EPW, May 19-26) discuss ing India's development strategy for the 1980s it characterised by his customary erudition and lucidity of style. But its analysis of our past economic performance, and of our future pro- spects and the strategy for maximally improving them, raising several key questions. We can think of no better tribute to Sukhamoy Chakravarty's intellectual efforts than to address these questions and to indicate our agreements and disagreements with him. We hope that this will prompt a debate on the vital issues of Indian economic policy at this critical point in our history.

Interaction between Trading Capital and Productive Capital in Agriculture-An Unexplained Reciprocity

Interaction between Trading Capital and Productive Capital in Agriculture An Unexplained Reciprocity Debdas Banerjee Pabitra Giri AJIT K Chowdhury and Kalyan K Sanyal in a paper ("Interaction between Trading Capital and Productive Capital in Agriculture: A Theoretical Approach", EPW, Review of Political Economy, July 28) have made an attempt to explain agricultural stagnation in the Third World in terms of existence of relatively profitable trading activity in advanced, capitalist islands surrounded by a large, precapitalist sector.

The Small But Healthy Hypothesis

The Small But Healthy?' Hypothesis A Reply to Critics David Seckler INTRODUCTION AS Payne and Cutler (1984) correctly observe, the fundamental issues in the current debate over nutrition theory and policy transcend nutrition per se and rest in the philosophy of science. However, having correctly established the locus of the debate in the philosophy of science, Payne and Cutler have restricted themselves to only a part

The Forest Question

The Forest 'Question' Walter Fernandes I HAVE gone through Ramchandra Guha's review of "Towards a New Forest Policy: People's Rights and Environmental Needs" edited by Shared Kulkami and myself (EPW, April 28, pp 711-712). I was surprised "to see the distortion of its contents by the reviewer who has either not understood what it says even after reading the book or has deliberately quoted phrases out of context to distort their meaning. For instance, the reviewer says "The book starts with the naive statement that the intentions of those who framed the Indian Forest Bill were 'laudable'. " It is obvious from the context and the reference of Chakravarti that the book speaks of the intentions of safeguarding the country's vanishing forests. But the fact of the draft Forest Bill being a follow up of the National Commission on Agriculture which accused the forest dwellers of destroying forests, made those working among the tribals and forest dwellers feel that "both the context of the bill and the language in which the proposed legislation was couched, gave greater importance to protecting forests from the tribals and other forest dwellers than from the commercial- industrial interests that have been at the root of the malaise" (p 1). When did the intention of protecting the country's vanishing forests become naive? The only question is not whether forests should be protected but whether they should be protected from the forest dwellers or from the commercial-industrial interests.

Some Observations on Economic Growth in India over the Period 1952-53 to 1982-83

Some Observations on Economic Growth in India over the Period 1952-53 to 1982-83 K N Raj THERE is a presumption in some of the recent discussions on Indian development experience that the rate of growth of output (i e, of gross domestic product) has decelerated since the middle of the 1960s; and that, since the rate of domestic investment has evidently gone up significantly over the last decade, incremental capital-output ratios have not only risen sharply but that this reflects increasingly wasteful and inefficient resource use in the economy. From this follow a variety of other generalisations and policy inferences, both economic and political. The proceedings of the MIT Conference on the 'Political Economy of Slow Industrial Growth in India', sponsored by the Social Science Research Council of the United States, provide rich examples,1 The deceleration hypotheses had their origin around the middle of the 1970s based mainly on data covering the preceding decade.2 However, even before the end of the 1970s, enough evidence had begun to emerge for questioning the presumption.3 Data subsequently available for the entire period covering the last three decades4 make it possible now to secure a broader perspective of the pattern of growth and fluctuation in the economy and to replace the earlier supposition on deceleration with more plausible hypotheses consistent with even the possibility of some improvement in the overall growth rate (and in the rate of industrial growth) since the middle of the 1970s.

On a Belated Apology for the Soviet Regime

On a Belated Apology for the Soviet Regime Paresh Chattopadhyay WHILE laying down the task for Andropov's successor (EPW, February 18) as well as his regime's critics (who include the "black intellectuals'' from the South and the (white) Marxists from the West) and mounting a well- deserved attack on Reagan, Kohl, Mitterand e tutti quanti (admonishing, in passing, the Chinese for "misreading Soviet power'') GPD has valiantly tried, at this late hour, to portray the 'developed socialist society' in conteur de rose. Though all praise for his valour and his remarkable capacity for drawing conclusions without any serious supporting demonstration we, as non-specialists, may be forgiven for making a few observations on his column.

Estate Staff in Plantations-Some Misconceptions

Estate Staff in Plantations Some Misconceptions P M Mathew PLANTATION labour is an often misconstrued area. Much of it owes to inadequate understanding of the role of social classes and the dynamics of unionisation in this 'industry' which is part of the agricultural sector. Ajit Mani's paper on estate staff in plantations (EPW, May 12,1984) is no exception. Though it does a good job of highlighting certain woes of this section of plantation employees, the paper involves many misconceptions, both theoretical and practical, regarding unionisation and, as a matter of fact, includes even factual errors. Some of the misconceptions arise from an inadequate theoretical perspective on the role of social classes and the modus operandi of class contradictions, while the factual errors and wrong conclusions therein have been due to inadequate dependence on quantitative data.


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