The speeches of K.C.Chakrabarty the newly appointed Deputy Governor of RBI, are a fresh breather (so far atleast). Not that other RBI speeches are not, but his speeches come with a different perspective and has useful references towards the end (which means more reading). It is full of interesting tables and charts which can be used for further research as well.
In this new speech he covers the reforms and progress in Indian economy. He divides the progress in real economy and fin economy and is a nice short read. He suggests how the reforms have got India onto a higher growth trajectory and onbe of the most sought after economies.
However, towards the end he asks –
Do We Deserve Accolades?
42. Structural transformation of almost all the segments of the economy during past two decades has brought discernible improvement in terms of efficiency, competitiveness and productivity. This reflects in economy moving over to higher growth trajectory with far greater integration with the rest of the world in terms of diversification of goods and services as well as destinations to which exports are being made. Of course, we take pride in these achievements and we together deserve it.
But, there are enough reasons that we must not get complacent with regard to transformation process. We need to ask ourselves a few relevant questions. How far the benefits of economic progress have percolated down? Whether standard of living of the population has uniformly improved? Can we say economic transformation has brought prosperity to public at large and could we make dent in poverty? I would like to flag and touch upon some of these areas, though do not claim to know the answer for all these questions.
He then covers our performance in Poverty, Socio-Economic Development, Health, Education with some interesting charts. Needless to say the performance is abysmal in each of these exspecially considering the high growth we have achieved. He adds we need action in 4 areas: agri investment, labour reforms, demo dividend and financial inclusion.
Clearly something has gone wrong. The policies are trying to address them but again we are just too married to high growth rates. Why can’t we show the picture as it is?
The high growth rates are important as Growth Commission report shows, but clearly we need to do a lot more than just smile at the growth rates. For instance, can the idea of India as an economic superpower be achieved on high growth rates alone? That is why it is important to do a reality check on just the relevance of GDP growth concept in India. The Stiglitz commission idea needs to become mainstream sooner.