Friday 18 August 2017

End of American Political Economy Part I

End of an era of complacency and American Political Economy! India can sustain 10% growth', TNN | Jul 16, 2011, 01.38 AM IST
Arvind Panagariya said as follows: "HYDERABAD: Reforms in labor, land and higher education are crucial for India to sustain economic growth over the next 15 years and emerge as a global economic superpower, Prof Arvind Panagariya, the Jagdish Bhagwati professor of Indian political economy at Columbia University, said on Friday". This speaks volumes about his credibility as a Professor of Indian Political economy made in America given the fact that India is struggling to achieve even 6.3-7.5 growth even after rigging the base year from 2003-4 to 2012-13 to inflate the growth rate by 2.2%. Hence, one does not need an American Ph.D. or Columbia University Political economist to figure out that the actual GDP growth rate will be at the level of what Dr. MM Singh left in 2014, i.e., 7.1-2.2 = 4.9%. This, in spite of the tall claim of three years of Modi Rule with an iron fist with neoliberal market reforms and complete surrender to American foreign policy. Further, his China obsession under both the regimes, the Congress led UPA 2004-2014 and since 2014 BJP prompted him to exaggerate growth to 11.5% in 2011 using short lived PPP theory and 7.5% having rigged the base year, has also been shattered with a recently revised estimate, after Annual Survey raises serious reservation about a growth in GDP even at 6.3.-7.5%.
Whatever the either government can claim, in reality, India's growth has been lopsided (jobless & low indices of Human Development) therein major part of the growth has been attributed to growth in the financial sector involving uncertainty, increase in luxury capital intensive goods and services. The manufacturing and agriculture sector continued to be in shambles. This led to the creation of two Indias: Rich and poor. It appears both, the Right consciously and some of the Left unconsciously, have been caught in the neoclassical Cobb-Web!
In fact, Panagariya used to boost a lot about the trickle-down impact of GDP growth claimed to have taken 110 million people off the poverty line reducing the BPL number to 29% according to the Govt figure which was amended to 39% by late Prof Suresh Tendulkar, Vice-Chairman of the Planning Commission. During the last three years of NDA, he has kept complete silence about the impact of economic reforms including the impact of demonetization and the GST.
NITI Ayog that was created in 2015 to replace the historical Planning Commission introduced in 1952 with Nehru-Mahalanobis as its founders. Unfortunately, in spite of the best endure fmto replace the Planning Commission the NITI Ayog could not become its substitute. In fact, in spite of amny tall claims of NITI Ayog, to date Govt continues to rely on the 13th Five Year Plan prepared during the UPA II Govt. On the other hand, there has been an adverse impact of the scraping the Planning Commission since a large number of people has been laid off since 2014. Other than some tangential role in the Centre-State relations NITI AYOG has been toothless and its Vice-Chairman having a ceremonial role. He had no impact at all on the Indian public policy. In fact, Panagariya' did not even got a second place in the NITI Ayog meetings chaired by the PM what it used to be under the old system of the Vice-Chairman of the Planning Commissions. No self- esteem was left for the guy! Perhaps, he got more respect under UPA II than in NDA Raj. No wonder he has resigned....but his exit has been painless contracting with former RBI Governor, Rajan.

To be continued....


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