Chidambaram invokes Amartya Sen, Jagdish Bhagwati to attack Modi

Ahmedabad, PTI | Updated : 29 July 2013, 07:58 PM

Finance minister P Chidambaram on Monday invoked growth models advocated by eminent economists Amartya Sen and Jagdish Bhagwati to attack Narendra Modi government's performance in healthcare and stressed the need for combining "passion for growth with compassion for poor". 

"As far as growth is concerned, I think we need both the Bhagwati and Sen models," Chidambaram said at an event. 

"India can never be a truly happy, prosperous country unless our passion for growth is combined with compassion for the poor. A large number of people in this country are poor," he said. 

Sen's model for growth advocates that India should invest more in its social infrastructure, while the model put forth by Bhagwati argues that mere focus on growth can yield enough resources for investing in social sector schemes. There is a very fascinating debate between 'growth and equity' going on between two pro-growth economic models suggested by "titans" like Bhagwati and Sen.

"I know there are alternative narratives in politics and that is how politics should be," he said. 

Citing the examples of Gujarat and Maharashtra, Chidambaram said, "When we look at the growth rates under the 11th Five Year Plan, Maharashtra was at 8.5% and Gujarat at 9.5%, not a big difference. 

"If you look at agricultural growth, then Maharashtra was at 2% and Gujarat at 6.65%. If we look at agri and allied sectors then Maharashtra was at 1.93% and Gujarat at 5.63%," he said. 

"Clearly we see Gujarat has an edge over Maharashtra in growth. In growth, we can say Gujarat scores over Maharashtra in GDP, agricultural growth," Chidambaram said. 

But, if we look at infant mortality rate (IMR), Gujarat has IMR of 44 per 1,000 in 2010-11, while Maharashtra was 28. 

Look at the Maternal Mortality Rate(MMR) figures of 2007-09 - 148 in Gujarat and 104 in Maharashtra, he said. In case of total fertility rate, it was 2.5% in Gujarat and 1.9 in Maharashtra. "If we take immunisation coverage then 94.7% coverage in Gujarat and 99.45% in Maharashtra," he said. 

Referring to gold imports, Chidambaram said, "imports were low in June but in July it has turned July the imports have risen, therefore those measures (to contain imports) continue". 

Gold imports were at 141 tonnes in April and rose to 162 tonnes in May. 

"About 302 tonnes of gold was imported in two months. If we multiply it by six, then 1,800 tonnes of gold is to be imported (in the fiscal). So where is the money to import 1,800 tonnes," he asked, justifying steps taken by the government and the Reserve Bank to curb gold imports. 

While the government increased customs duty on gold to 8%, the Reserve Bank imposed a series of restrictions on import and financing of gold. 

The minister said India imported 845 tonnes of gold in 2012-13 for which the nation had to shell out $50 billion (about Rs 3 lakh crore) in foreign exchange. 

Admitting that it was difficult to persuade people not to buy gold, Chidambaram said, "I just ask them to moderate gold purchases. If they are buying 20 grams, I ask them instead to buy 10 grams." 

On growth prospects, he said: "Our best minds are working and trying to address the challenges. I am sure in the current year our growth will be 6% against the last years 5%." 

The growth rate, he further said, would improve to 7% in next fiscal and 8% thereafter. 

First Published: Monday, July 29, 2013 07:56 PM
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