ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Some Observations on Economic Growth in India

Some Observations on Economic Growth in India Pranab Bardhan IN a recent contribution, K N Raj (1984) has made a number of critical comments on,the proceedingr-of the 1983 SSRC conference on the Political Economy of Slow Industrial Growth in India, as summarised in a paper by A Varshny (1984). He has even offered an explanation of the deficiencies of the participants in terms of the fact "that the majority of the participants in the tonference are located abroad and therefore not sufficiently familiar with the wide variety of Indian data and their complexities". As a participant in this conference I find it unfortunate that Raj decided to make detailed comments on the conference only on the basis of an individual's published summary report without bothering to check at what leve of complexity and details the issues were actually discussed. As a result some of his comments are derived purely from misinformed guesses about what went on at the conference. On some, other issues there can obviously be differences of opinion (as.there was plenty of in the conference itself) between him and others, but lack of familiarity with the complexity of Indian data is not the basis of such differences. As a matter of fact some of the participants in the conference discussed Indian data at a much more detailed and disaggregated level than Raj with his superior access and familiarity has presented in the tables in his comment. I shall now briefly touch on some of the substantive issues raised by Raj. Needless to say, it represents only my personal views and I do not want to implicate the other participants. (1) Raj spends some space in trying to demolish the alleged hypothesis of deceleration in the rate of growth of gross domestic product. As the title Of the conference (as well as that and the contents of the paper by Varshney) should have made it clear, this is not what the conference discussed. The focus of the conference was on slow industrial growth. On the basis of disaggregated national accounts data for value added at constant 1970-71 prices for about thirty years, some of the participants showed a statistically significant deceleration in the annual rate of growth in the registered manufacturing sector between the first and the second half of this period. For example, fitting a semi-logarithmic growth equation, this estimated rate fell from about seven per cent in the period from 1956-57 to 1965-66 to about five per cent in the period from 1966-67 to 1981-82. For details see I Ahluwalia (1983) and Bardhan (1984), (This, by the way, is a less unsatisfactory way of analysing the data than dealing with the year-to-year growth rates that Raj presents.) Apart from deceleration in industrial growth rate, the participants in the conference also discussed in some details the relative slowness of the growth rate itself compared to that in some other developing countries and compared to the potential India has.

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