Economic Development In India

INTRODUCTION Today one of the most controversial debates is that of development and growth. Growth is generally referred to as positive increase in the size or number. Economic growth means “the increase in the capacity of an economy to produce goods and services compared from one period of time to another”. It is a narrower concept than economic development. Economic development applies to “people’s sense of morality”. It is normative in nature. “Development”, according to Todaro and Smith means, “the process of improving the quality of all human lives and capabilities by raising people’s levels of living, self-esteem and freedom”. Recently, the World Bank has argued for widening our goals beyond national incomes, fiscal health and stability

There was no reduction in the poverty level especially in the rural areas. Many scholars argue that the reason for the failure of the Indian economy was the “socialist” nature of our planning. Indian socialism was inspired by the Soviet Union’s nature of socialism. However, socialism in India did not actually go the way it was decided by the Indian planners and the effects were nothing like that of Soviet socialism. Indian socialism although inspired by Soviet socialism was very different in practice. Indian socialism was more of that of state led development. The early economic planning failed more in terms of social infrastructure and tertiary sectors than it did in primary and secondary production. The GDP growth rate of 4% however showed overall

Amartya Sen favours redistribution which in turn would lead to growth according to him whereas Bhagwati talks about growth and believes that redistribution cannot be the answer for growth. Amartya Sen considers growth important for poverty alleviation. He says “Economic growth is indeed important, not for itself, but for what it allows a country to do with the resources that are generated, expanding both individual incomes and the public revenue that can be used to meet social commitments.” Sen considers economic growth as a mean and not as an end. He talks about spending more in social spheres like education, health etc. He strongly favours delivery by the state: food through public distribution system, education through government run school, education through government run schools and health through government run health centres. In this common goal of reducing poverty, according to Sen, redistributive justice, buffeted by institutional reform, should take precedence, which would, in turn, drive growth. However none of the two is against redistribution or against growth. In fact Bhagwati says that,” the optimal policy design should generally involve a mix of these two approaches unless the ‘productivity’ of either in achieving the target substantially dominates the other”. If we take Bhagwati’s point then direct intervention