[Dec 2007, Volume 4 Quarterly Issue] Pdf File size - The IIPM Think ...

MORE MARKETS, LESS GOVERNMENT
equity”, the interdependence between
agriculture and industry and the dilemma
between the need for widening the
market and the prevention of the abuse
of monopoly power.
Especially with regard to the abuse of
monopoly power, let us also for example
and for a moment keep in view economists
and others who act like petty salesmen
for the Commerce Ministry concept
of SEZs. These economists, both within
state institutions and belonging to dubious
NGOs, who on the one hand are the
loudest ones to run the State down while
singing the paens of the market, are the
same ones on the other hand who are encouraging
the worst abuses of monopoly
power and the dismantling of the constitutional
state in the name of SEZs. There
can be no greater irony than this. SEZs
are best described as state encouraged
rapacity by market players who cannot
function in a market more even handedly
regulated by the state and by a state
that stands by the Indian Constitution
and its protections for the rights of all
citizens, be they poor peasants or workers.
Those professing an almost evangelistic
deal to have “growth at any cost”
are oblivious to the principle that any
abuse of monopoly power by the state in
the name of the market, is a sure recipe
that can take any nation however great it
may be, including India, down a vortex of
social instability and violence. This is the
reality that is stares before us not only in
the aftermath of Nandigram but in places
like Mangalore, where fraud and deception
is sought to used to divest people
of productive agricultural land and create
social tension and conflict. Finance
Minister Chidambaram’s note of caution
at the recent Indian Economic Forum
that growth cannot be only for the top
ten percent is not only a welcome note of
caution but also an indication that
policy making at the highest level is
recognizing the larger objectives of
economic growth.
Such caution seems absent at the Commerce
Ministry and most statements that
emanate from the Commerce Ministry,
including that of the Commerce Secretary
seems not only totally oblivious to
ground realities but a very unbalanced
approach to economic growth priorities.
While it is a matter of very deep concern
as regards the long term implications for
India of the SEZ route to rapid economic
growth, the fact is that the disastrous
nature of its implementation could actually
bring down the government and the
Congress Party to which belongs Mr.
Kamal Nath the Commerce Minister
whose Ministry seems to be recklessly
spearheading the SEZ concept. Though
all this may not happen before huge economic
and social costs have accrued to
the nation in terms of not only the accentuated
conflicts it is going to engender
but also in terms of the loss of revenues
in terms of the state and loss of income
and livelihood for thousands of people.
In a globalised world where sovereignty
is also at stake, the Commerce Ministry
can try to run rough shod over all other
Ministries including the Finance Ministry.
However, what such deepening fissures
in economic governance shows is
the possibilities that exist for sections of
the market to use one instrumentality of
state, in this case the Commerce Ministry,
to undermine the state as a whole
and thereby society, showing the hollowness
of arguments pitting market versus
the state. In the end the greed and rapacity
of the market can take both state and
market together down.
The challenge for the academic as well
as working economist, for any person
concerned about and engaged with public
policy, is how even in these circumstances
to focus on long term issues for
the country as a whole. In the Indian
context, what seems in my mind and
echoing Sukhamoy Chakravarty, a key
issue that is of great relevance for the immediate
and the long term, is “a proper
formulation of the role of knowledge as
A key issue that is of great relevance for the immediate
and the long term is “a proper formulation of the role of
knowledge as a productive factor” and “institutional arrangements
necessary for transition to a ‘learning society’
a productive factor” and “institutional
arrangements necessary for transition to
a ‘learning society’ ".
Knowledge And The Learning
Society
Chakravarty refers to Simon Kuznets
who was of the conclusion that in the final
analysis, it was the growth of knowledge
which was the most decisive characteristic
of modern economic growth.
Here Kuznets was not referring to technology
alone but as Chakravarty puts it,
“also of basic sciences which are increasingly
having profound impacts on transformations
in the sphere of production
that are leading to changes in the international
economy”. He warns us that a
THE INDIA ECONOMY REVIEW
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