Jadgish Bhagwati and Arvind Panagariya are well known proponents of free trade and globalization based at Columbia University. In fact, Bhagwati has long been considered a contender for the Nobel Prize in Economics for his work on International Trade. Bhagwati and Panagariya have written a hard-hitting book titled India’s Tryst with Destiny: Debunking Myths that Undermine Progress and Addressing New Challenges (2012) which presents a strong case for economic reforms and advocate further reforms for promoting growth in India.
You may have heard about the famous Jagdish Bhagwati – Amartya Sen debate on growth versus redistribution. Simply put, Bhagwati believes that economic growth is vital for India’s development while Sen advocates that it is redistribution that will bring about the welfare of the masses. I must say I am firmly on Bhagwati’s side. I think redistribution may be good for India but without growth there can be no redistribution in the first place. It is India’s tremendous growth in the post liberalization era that resulted in the surplus that made welfare schemes such as NREGA possible.
The authors begin the book by looking at several myths of which some are:
1. “Growth is not necessary for poverty alleviation; redistribution alone suffices.”
2. “By itself, growth makes ‘the rich richer and the poor poorer’. To reduce poverty, redistribution is necessary.”
3. “There has been no reduction in poverty as a result of post-1991 reforms.”
4. “Reforms have bypassed, even hurt, the socially disadvantaged groups.”
5. “Reforms have increased inequality.”
etc…
Relying on the latest available statistics, Bhagwati and Panagariya painstakingly build a case to the contrary.
Later on in the book the authors go about making suggestions on how to progress further on reforms “aimed at accelerating and sustaining growth” and reforms that “make redistributive programmes more effective”. They point out that the labour laws such as Industrial Disputes Act, 1947 and the Contract Labour (Regulation and Abolition) Act, 1970 are in much need of reform. Even where they propose measures for redistribution, their position on various issues like NREGA, food security, etc. is admirable.
Bhagwati and Panagariya have built a strong case for reforms. The book cannot be dismissed lightly and critics need to provide serious counterarguments, not vague assertions. This book will be a valuable weapon in the pro-reform activists’ arsenal and a serious counterattack on the anti-reform critics.
You may have heard about the famous Jagdish Bhagwati – Amartya Sen debate on growth versus redistribution. Simply put, Bhagwati believes that economic growth is vital for India’s development while Sen advocates that it is redistribution that will bring about the welfare of the masses. I must say I am firmly on Bhagwati’s side. I think redistribution may be good for India but without growth there can be no redistribution in the first place. It is India’s tremendous growth in the post liberalization era that resulted in the surplus that made welfare schemes such as NREGA possible.
The authors begin the book by looking at several myths of which some are:
1. “Growth is not necessary for poverty alleviation; redistribution alone suffices.”
2. “By itself, growth makes ‘the rich richer and the poor poorer’. To reduce poverty, redistribution is necessary.”
3. “There has been no reduction in poverty as a result of post-1991 reforms.”
4. “Reforms have bypassed, even hurt, the socially disadvantaged groups.”
5. “Reforms have increased inequality.”
etc…
Relying on the latest available statistics, Bhagwati and Panagariya painstakingly build a case to the contrary.
Later on in the book the authors go about making suggestions on how to progress further on reforms “aimed at accelerating and sustaining growth” and reforms that “make redistributive programmes more effective”. They point out that the labour laws such as Industrial Disputes Act, 1947 and the Contract Labour (Regulation and Abolition) Act, 1970 are in much need of reform. Even where they propose measures for redistribution, their position on various issues like NREGA, food security, etc. is admirable.
Bhagwati and Panagariya have built a strong case for reforms. The book cannot be dismissed lightly and critics need to provide serious counterarguments, not vague assertions. This book will be a valuable weapon in the pro-reform activists’ arsenal and a serious counterattack on the anti-reform critics.
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