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Economic Growth is a Must for Poverty Reduction: Plan
Panel Chief
July 11, 2011, New Delhi
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“Independent of the method of
assessment, poverty in India has decreased in the last two
decades. However, this has not translated into equality of
access to opportunities. And therefore, ‘inclusion’ requires
a multi-pronged response,” said Montek Singh Ahluwalia,
Deputy Chairman of the Planning Commission. He added that
there is greater economic growth across all states, however,
within states the inequality is worrisome. He underlined
that four areas require concerted efforts, namely: energy,
agriculture, urbanisation, water and land, to make growth
inclusive.
He was speaking at the release of a book titled “Growth
and Poverty – The Great Debate”, and a well attended
panel discussion organised by CUTS International today in
New Delhi. The book is an outcome of a debate on the CUTS
e-forum, which was triggered by a lecture at the parliament
by noted economist Professor Jagdish Bhagwati in December
last year. The other panellists, who spoke at the event
included, Bibek Debroy, Ashok Chawla, Nirmala Sitharaman,
Jean Pierre Lehmann, and Shekhar Shah.
Introducing the subject, Pradeep Mehta, Secretary General of
CUTS, as the Chairman of the event, said that without the
kind of economic growth over the last two decades the
reduction in poverty would not have been achieved. However,
in order to improve the efficacy of economic growth, more
efforts are needed to improve ‘access to opportunities’ of
disadvantaged communities so that they can overcome the
poverty trap.
“As Prof Bhagwati said in his famous lecture, we now need to
launch Stage-2 reforms to address the social deficit, i.e.
education and health care”, said Mehta. “In fact if one
looks at the successes in many South East and East Asian
countries, the social issues were addressed concomitantly
with economic liberalisation, and results of the same are
very visible”.
On the issue of inequality across territories, Bibek Debroy
of the Centre for Policy Research raised a key question that
why poverty and inequality are concentrated in a few
districts of India and why have we not been able to address
this? Ashok Chawla, former finance secretary, asserted that
along with growth it is important to ensure that
government’s resources in terms of tax-GDP ratio need to be
improved. This will generate more resources for direct
intervention on the part of the government.
Nirmala Sitharaman, national spokesperson of Bhartiya Janata
Party highlighted that there is lack of institutional
readiness to take up the challenges of liberalisation. She
added that we are giving out doles, rather than creating
employment opportunities. In the current framework there are
disincentives for entrepreneurs and micro-enterprises, which
are bad for both growth as well as poverty reduction.
Jean Pierre Lehmann of the IMD, Lausanne draw attention to
the fact that given that many countries are disadvantaged in
terms of demography, etc, India holds a great future.
Shekhar Shah, director general of National Council of
Applied Economic Research reinforced the idea that growth
provides the resources, which in turn, ensure the ‘equality
of access to opportunities’. He referred to the history of
economic growth where one sees that a lot of countries,
which gained a growth rate of seven per cent or so over
twenty five years, have faded away later. He added that only
those countries have survived which developed ‘institutional
endowment’ to help them sustain the growth.
In response to the floor discussions, Ms Sitharaman said
that the huge governance deficit will negate all efforts to
reduce poverty. In conclusion, Mehta said that the next
debate on the CUTS e-fora will be conducted on the issues of
governance and institutional reforms to address the poverty
reduction agenda in India.
For more information, please contact:
Bipul Chatterjee,
bc@cuts.org, +91 98292 85921
Navneet Sharma,
ns@circ.in, +91 92127 23123 |
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