Articles by T N Srinivasan

Privatisation and Deregulation T N Srinivasan ASHOK RUDRA's questioning (December 21, 1991) of the policy conclusions reached in my recent writings (August 3-10 and September 14, 1991) calls for a response. Before 1 turn to it, let me thank him for his kind remarks about me and assure him that his critical remarks will in no way affect our long personal and professional relations stretching back to the year 1954 when young Rudra joined the faculty of the Indian Statistical Institute (ISI) Calcutta and taught time-scries analysis to students, including me, in ISPs two-year professional training course in statistics. Let me take this oppor tunity to respond also to the comments of my friend and former ISI colleague, Deb Kumar Bose (February 22, 1992) and to A C Minocha (October 26, 1991). There is much with which 1 agree in the comments of my friend and former ISI colleague K S Parikh (February 29, 1992). It should be clear from what follows where we disagree, Rudra disputes that economic analysis has much to say on what activities should be in the public sector. I am surprised at his asser tion. At a purely analytical level, neoclassical welfare economics (either in its Pigouvian or the Arrow-Debreu version) makes a case for public intervention, either on the grounds that a competitive equilibrium can fail to be a Pareto Optimum under certain situations collectively described as 'market failures', or because the distributional outcome of a laissez-faire competitive equilibrium, although Pareto Optimal, is deemed socially unsatisfactory. Textbook examples of market failures include: externalities of various kinds that are not internalised by any private decision maker, the existence of 'public' goods, i e, goods that have the characteristics such as non-rivalry in use (e g, one person's use of a park does not reduce its availability for use by another person, at least until the number of users is not large enough to create congestion) and non-excludability of some users from others (e g, radio broadcasts), and of significant scale economies in the production of particular goods or services, the presence of which precludes a com petitive market structure. Also if certain markets do not exist (e g, markets for insurance against various risks or for various assets), the competitive equilibrium based on markets that do exist need not be a Pareto Optimum. Thus if the market structure is not complete in the sense of Arrow-Debreu, there is scope for government intervention.

Indian Development Strategy An Exchange of Views T N Srinivasan We have to face up to the fact that our development strategy and the whole bureaucratic planning and control system that implemented it have failed. The failure is systemic.

There has been a decline in the rate of growth of cross sown area, in particular under non-food crops, in the decade starting from 1967-68 compared to the fifteen years ending in 1964*65, but the output (and yield per unit of area) of food crops and all crops grew more or less uniformly over the entire period 1949.50 to 1977-78 with no evidence of either acceleration or deceleration since 1967-68.

November 26, 1977 Constraints on Growth and Policy Options T N Srinivasan IN two recent articles in this weekly, Vaidyanathan has put forth the propositions that (i) a step-up in the growth rate of agriculture much above 3 per cent per annum is infeasible, (ii) a step-up in the growth of manufactured exports (non-agriculture based), while not infeasible, is not desirable because of the changes that attempts to export more would involve in. many fundamental tenets, including political, of current development policy, (iii) given the first two propositions, attempt to push the aggregate growth beyond 4 per cent per annum would be inflationary and wasteful and finally, (iv) with a growth of 4 per cent per annum, a large anti-poverty programme consisting mostly of rural works would be needed to improve the lot of the poor and its success would depend on the development of "viable and responsible" local constitutions.1 Since Vaidya- nathan's contribution is in part a reply to an earlier article I co-authored, I should be permitted a brief rejoinder.3 It is a bit ironic, that Vaidyanathan, who in his distinguished career with the Perspective Planning Division of the Planning Commission 'was associated in the middle 1960s in the work that led to target growth rates of real national income of the order of 7 per cent per annum (with agriculture growing at 4-1/2 per cent) over the fifteen-year period starting in 1960-61 should now argue for a much more modest growth rate and some of us, who felt that the earlier targets were unrealistic, should now be arguing for a step-up in growth. But in fact, Vaidyanathan's . conversion to "realism'' from "wild optimism'' is a decade and a half too late during which the economy has left him behind I The events have shown that he was dead wrong then and I dare say he is dead wrong now.

of their conditions. On the other hand, the newly emerged owner-cultivators, too, are highly organised and politicised, unlike the traditional landlords. The crystallisation of these oppositional forces inevitably gives birth to the formation of interest groups and associations championing their causes. But these broad categories are not internally homogeneous, given the elongated agrarian hierarchy and the elaborate divi- sion of labour in agriculture. This situation led to the proliferation of various agrarian associations, each of which bargained for the betterment of the category it represented. Thus, an indirect but important consequence of 'movement militancy' was the wider participation of the people in the implementation processes relating to agrarian legislations.