(Any opinions expressed here are those of the author and not of Thomson Reuters)
As debates in India go, the one between Amartya Sen and Jagdish Bhagwati – two of India’s leading economists – has been fairly civil. Not the belligerent speeches or noisy protests that characterise public discourse in the country. Instead, this battle of ideas is taking place in the rarefied circle of the nation’s think tanks and financial pages, with economists, writers and policy makers weighing in. But the civility cannot mask the intensity on both sides; moving beyond economic data and models, the debate has become personal. At stake is a very powerful question – what is the best way to improve the lot of India’s citizens?
Conveniently, both sides have articulated their vision for the country in two recent books. The first by Sen and his long time collaborator, Jean Dreze, titled “An Uncertain Glory” questions why India continues to lag on all social indicators despite two decades of free-market reforms. Their data shows that the country’s growth has largely bypassed the poor and that the reforms have benefited a privileged minority. To correct this imbalance, Sen and Dreze make the case for greater public intervention in health and education.
On the other side of the economic spectrum is ”Why Growth Matters“ by Bhagwati and Arvind Panagariya, his colleague at Columbia University. Their book is a forceful defence of India’s growth story. Bhagwati and Panagariya assert that reducing the role of the government and allowing private enterprises to flourish is the only way to lift millions of Indians out of poverty. The state can fund welfare programs only if the economy is growing at a fair clip and public revenues are healthy. That such an idea is even up for debate is frustrating to them.
On the face of it, the positions by Sen and Bhagwati fall nicely along party lines. Both Jean Dreze and Amartya Sen have been vocal advocates of the public entitlement schemes launched by the Congress-led government. Dreze helped draft the National Rural Employment Guarantee Act (NREGA), which guarantees 100 days of minimum-wage employment to every rural household. The two economists have also blessed the National Food Security bill which makes the right to food a legal entitlement.
Meanwhile, Jagdish Bhagwati has endorsed the “Gujarat model” that the BJP has placed at the front and centre of its 2014 campaign. Their candidate, Narendra Modi has also made all the right noises about small government and accelerating the reform agenda, which mirror the arguments by Bhagwati and Panagariya. Mindful of the electoral arithmetic, the party hasn’t explicitly opposed the welfare schemes, but remains sceptical of their efficacy.