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Partha Dasgupta: Getting India Wrong: Noted for July 27, 2013

Partha Dasgupta: Getting India wrong:

Uncertain Glory: India and Its Contradictions by Jean Drèze and Amartya Sen (Allen Lane, £20). Why Growth Matters: How Economic Growth in India Reduced Poverty by Jagdish Bhagwati and Arvind Panagariya (PublicAffairs, £19.99)

A central message of modern development economics is the importance of income growth…. In the early 1980s the government of India initiated a programme of economic liberalisation. It is now widely acknowledged that the resulting structural reforms led to the impressive economic growth…. The proportion of people whose incomes are below the country’s official poverty line declined from 45 per cent in the early 1980s to 28 per cent in 2005. The decline is impressive, but the latter figure tells us that the country still harbours widespread deprivation….

Jagdish Bhagwati and Arvind Panagariya, two prominent experts on the Indian economy, are known enthusiasts of the government’s liberalisation programme. In their new book they target a number of “myths” (their term) that critics have created about India’s recent performance in health, education and the distribution of income….

Jean Drèze and Amartya Sen, also prominent experts on the Indian economy, are well-known critics of the liberalisation programme…. Their target is the neglect by successive governments of health and education, which they see as having given rise to the enormous inequities that characterise the Indian economy….

The problem that undermines both books is that neither GDP, nor the many other ad hoc indicators of human well-being that have been advanced in recent years, are suitable indicators of economic development…. A vast number of case studies have uncovered deep connections between the persistence (indeed, often worsening) of rural poverty in the Indian sub-continent and the habitat destruction that has accompanied economic and population growth…. Neither book has been informed by those findings. Indeed neither even broaches the economic distress associated with high population growth in a poor society (in this century India’s population has grown at around 1.6 per cent annually—an additional 16m people or more per year). Nor does either book study the massive transformation of India’s ecological landscape in recent decades as a factor in the lives of the country’s poorest.