Constraints on Growth and Policy Options-A Comment

November 26, 1977 Constraints on Growth and Policy Options T N Srinivasan IN two recent articles in this weekly, Vaidyanathan has put forth the propositions that (i) a step-up in the growth rate of agriculture much above 3 per cent per annum is infeasible, (ii) a step-up in the growth of manufactured exports (non-agriculture based), while not infeasible, is not desirable because of the changes that attempts to export more would involve in. many fundamental tenets, including political, of current development policy, (iii) given the first two propositions, attempt to push the aggregate growth beyond 4 per cent per annum would be inflationary and wasteful and finally, (iv) with a growth of 4 per cent per annum, a large anti-poverty programme consisting mostly of rural works would be needed to improve the lot of the poor and its success would depend on the development of "viable and responsible" local constitutions.1 Since Vaidya- nathan's contribution is in part a reply to an earlier article I co-authored, I should be permitted a brief rejoinder.3 It is a bit ironic, that Vaidyanathan, who in his distinguished career with the Perspective Planning Division of the Planning Commission 'was associated in the middle 1960s in the work that led to target growth rates of real national income of the order of 7 per cent per annum (with agriculture growing at 4-1/2 per cent) over the fifteen-year period starting in 1960-61 should now argue for a much more modest growth rate and some of us, who felt that the earlier targets were unrealistic, should now be arguing for a step-up in growth. But in fact, Vaidyanathan's . conversion to "realism'' from "wild optimism'' is a decade and a half too late during which the economy has left him behind I The events have shown that he was dead wrong then and I dare say he is dead wrong now.