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Wednesday 22 December 2010

Nobel laureate attacks India on growth

By James Lamont, FT.com
December 22, 2010 -- Updated 0256 GMT (1056 HKT)
Indian Nobel Laureate and noted economist Amartya Sen delivers an address in New Delhi in January 2004.
Indian Nobel Laureate and noted economist Amartya Sen delivers an address in New Delhi in January 2004.
STORY HIGHLIGHTS
  • Sen: Indian fixation with surpassing China's growth is "very stupid"
  • Sen was responding to an obsession with India's climbing growth rate

(FT) -- The Indian fixation with surpassing China's rate of economic growth is "very stupid" as a measure of the nation's advancement, Amartya Sen, the world-renowned scholar and Nobel laureate for economics, has warned.

Prof Sen on Tuesday said that such comparisons between the two rising economies were dangerously misguided, and recommended that Indian leaders pay more attention to reducing chronic undernourishment among their country's 1.2bn people than pursuing ever higher growth targets.

"I don't think the issue of India and China and which one will have a higher rate of growth is interesting at all," Prof Sen told students and young entrepreneurs in the Indian capital. "It's not a serious question how [India's] 8.5 per cent compares with [China's] 9.5 per cent."

Mr Sen was responding to an obsession with India's climbing growth rate among New Delhi's policy elite, a focus that often overlooks whether greater activity in parts of the country translates into improved human development indicators.

Indians suffer some of the severest nutritional deficiencies in the world. Stunted development affects about half of the nation's young children.

Manmohan Singh, prime minister and close friend of Prof Sen, has forecast that India will reach 10 per cent economic growth in the medium term, placing it on par with China.

Data released last month showed that India's economy grew close to 9 per cent in the three months to the end of September. Business leaders and policymakers believe India could grow much faster but acknowledge that faster, unbalanced growth could pose dangers for the country.

One Mumbai-based business leader describe India's current growth as a "default rate" that could easily be exceeded if government intervention was lessened.

Prof Sen said higher growth was a "positive thing" in the context of social justice, poverty reduction and directing greater public revenues towards health and education.

He proposed that greater attention be given to whether India was "falling behind" in feeding its population at a time of high food prices and what India could learn from China about social improvement. "Why is it that undernourishment is so hardy [in India]?" he asked.

© The Financial Times Limited 2010

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