Economic growth focus widened disparities in India: Princeton prof

Princeton University professor Dr Atul Kohli said that that the dividends of economic growth have been shared inequally

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Geetanjali Minhas | August 21, 2012



India's relentless pursuit of economic growth left in the last two decades has had a huge cost on social welfare, believes Dr Atul Kohli, professor of politics and international affairs at the Princeton University.  Kohli said, " India has a pro-business model which while facilitating economic growth, widened conomic inequalities along rural-urban, regional and class lines impacting poverty alleviation. With the focus primarily on growth, social programs have only been pursued half-heartedly." The professor was delivering the inaugural B G Deshmukh Menorial Lecture on Governance at the Tata Institute of Social Sciences in Mumbai. The Ivy League scholar spoke on 'Regional diversities in India's development: The role of governance'.

Dr Kohli founded his lecture on the political economy of India on his recently published work 'Poverty and Plenty in India' in hich he has commented on the regional diversities in the country and hopw they have shaped the changing nature of governance in the country.

“Per capita income  across India’s states vary enormously. India’s richest state Haryana is nearly four times wealthier than India’s poorest state, Bihar. In comparison, the difference in the median household income between Mississippi and New Hampshire (the poorest and richest US states, respectively) was  less than 1.2 in 2009. India’s largest states, Bihar and UP are also its poorest states.While India’s richest states- Gujarat, Maharashtra and Haryana have grown rapidly in last two decades,poverty has come down the most in West Bengal” he said.

In the lecture, professor Kohli elucidated the following three points from his book:

1. Over the last three decades, the economy has grown and so have inequalities and as a result of these inequalities, poverty has declined very slowly.

2. Pattern of development and the narrowing index of Indian political economy in which Indian state is increasingly aligned with business groups and prioritized economic growth.

3. This narrow alliance has excluded large amount of people from sharing fruits of growth and created new political problems.

While the first two sections of the book are on the chnaging nature of the Indian state in the past few decades, the newly forged alliances between the state and business groups and the role of government in the new economy and the impact of pro-business economic policies, the third section is on growing disparities across regional lines in the country. Kohli writes that there are three political tendencies cvompeting for ascendancy:

1. neo-patrimonial, where the ruling class, largely personality-centric, feel that the public is a part of its personal patrimony,

2. social democratic, often a populist form of politicking, where the state has a broader social base and uses its power constructively at times to ameliorate social ills, and,

3. Developmental, where the state prioritises economic growth and uses its powers to promote growth.

“Personality-centred politics has led to fairly dismal consequences and economic outcomes. These are long term trends and continue to  come from past. These  can only be altered by slow and steady commercial development or political change produced by democratic politics and new leadership,” Kohli opined.

He illustrated the three political tendencies taking up the examples of Uttar Pradesh, Gujarat and West Bengal. "UP does poorly on all developmental dimensions, per-capita income, economic growth, poverty count, poverty amelioration, literacy amd human development index. For over five decades, development in UP has been dependent on public investments. The role of the government in UP has remained extremely critical. Statistics show that is public revenue is not used efficiently then it has a deletrious effect on development. UP's interbal tax mobilisation is the worst in the country and its expenditure pattern has had little focus on development. Even resources that have come from the union government have often been returned unused. The state has rearely asked for more, unlike Gujarat which has been pushing the frontier for developmentg funds from Delhi," he said.

“The political leadership has not focused on development or public goals. They have retained personal goals - how to stay in power, how to benefit their narrow constituencies, how to leave behind some sort of historical legacy, how to bring statutes. The entire focus of governance is anything but development in neo- patrimonial states. Variety of failed public policies and an accumulation of failures have led to undermining of growth .Due to poor infrastructure, red tape  and multi-dimensional failure, the private sector is not interested in state,” the professor added.

While the professor acknowledged Gujarat's superior performance in economic growth, he clearly stated that the coalition of the ruling class and economic elite in the state predates the BJP government in power in the state. 

“WB is a middle performer on most dimensions except in poverty reduction. As compared to the Indian average of 0.8 percent, the poverty reduction figure in WB is 1.3 percent. The single ruling party for longest time, CPM,  with a lower middle class base, implemented modest land reforms  and contributed to short term poverty reductions. When agricultural growth was back on track, the fruits of the land reforms were shared much more broadly.”

On varying governance patterns across states, Dr Kohli said that the nature of political and economic elite ruling states has been different. Ruling commercial elite came to forefront in Gujarat early and moved regional politics. Indigenous commercial impulse was weak in Bengal as Bengalis took more to arts, music and politics. The Bengali elite was essentially intelligentsia, the ‘Bhadralok’, and what emerged was a nationalistic, social democratic state. UP had neither  economic nor political modernisers. It had traditional caste vote banks - the Zamindars, Brahmins and the dalits who bickered along factional lines and monopolized fruits of power. Politics in UP became an end in itself without public purpose.

“While pure market growth will be drive the long term change, state intervention will be critical for short to medium term. Political or bureaucratic changes or governance reforms will be necessary for inclusive growth in near future,” Kohli concluded.

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