NITI AYOG FAILURE!
I have previously commented on a somewhat similar article exposing complacency and the nexus between the World Bank/IMF Bandwagon and allegedly Bhagwati-Panagariya approach to development. Therefore, I will deal with the last paragraphs of his article. The author is badly mistaken in categorizing development model into two different schools of thoughts dividing them into Bhagwati-Panagariay and AK Sen although these schools are two sides of the same coin, namely, neo-classical School of thoughts, first propounded an Austrian economist, Hayek who believed in Laissez-fair economy and the second one is welfare economy. In fact, soon after the French Revolution German Chancellor Bismark carried out some of these reforms not so much for the welfare of the people but to prevent possible revolution in Germany. Traces of such reform were also aired by US President Roosevelt in 1930's addressing the workers on the famous Flint Street sit down. The author also claims to have suggested a third approach which also already subsumed into Welfare School of thoughts.
Bhagwati-Panagariya story of India as an emerging giant appeared to be over as India's growth was heading toward the well-known 'Hindu' Rate of growth. If one follows Panagariya's absurd logic to adjust the rate of growth with the Purchasing Power Parity as he did in 2010 Econometric Society Lecture to inflate India's growth to 11.5%, to make it look, as if India was going ahead of China (what is known as China obsession) than India’s growth turned out to be about 3.5% and further adjustment to work out the green GDP, Indian economy was heading toward a ‘Zero’ rate of growth (after adjusting with devaluation of India rupee and accounting for errors of measurement). The critic of liberalization like AK Sen characterized the growth of India economy as jobless and emphasized the need for investment in the social sector, like in Korea, Japan, & China, which led to higher growth in those countries. Moreover, if the purpose of growth is to improve the quality of life as opposed to a number of billionaires than the hard choice has to be made to improve human capital formation. He also strongly supported the food security bill of UPA II on the ground that it would save millions of lives every year.
On the other hand, Bhagwati and Pangariya criticized food security bill on somewhat bizarre ground that the poor people would keep the current level of consumption and would sell the additional food and buy something else. This argument is against the very principles neoclassical economics that the agents are rational which they intend to defend throughout their approach. Unless people are irrational they would likely to provide their children better diet by struggling less rather than selling food for the money in the open market. And if the food security bill is amended to include 100% population it would take care of the even remote possibility of black marketing.
The above schools have been around for a very long time under different expect new terminology has replaced the old ones. If one looks at the Development Book of the 1960s by Arthur Lewis, Hagen, Higgins, Todaro, and Yutopolous and Nugent etc. , one could find trickle down, percolation effect, spread effect, divergence-convergence, etc. The author has conveniently forgotten the third school which is often used to save the ‘free-market’ by partial nationalization one of the gradients of ‘Socialism which became less popular since the collapse of USSR model of State Capitalism rather than market socialism.usly commented on a somewhat similar article exposing complacency and the nexus between the World Bank/IMF Bandwagon and alleged