IGIDR Annual Report 2008-2009 - Indira Gandhi Institute of ...

Research Activitieslower volatility. Output response is higher andvolatility lower with fixed terms of trade,demonstrating the flatter supply curve. CPI inflationtargeting also does well when terms of trade arecredibly fixed.DevelopmentM. H. Suryanarayana (in ―What is Exclusive about‗Inclusive Growth?,‖ Economic and Political Weekly,2008, Vol. XLIII, No. 18, pp. 13-17) deals with theissue of inclusive growth. In the wake of the economicreform programme undertaken since 1991,distributional issues have received considerableattention and policy concern. In pursuit of suchconcerns, the government has worked out an approachto the Eleventh Five Year Plan, which lays emphasison, though without defining, a strategy of inclusivegrowth. In fact, this form of pursuit of inclusive growthhas become virtually a universal concern with even theUNDP harping on it without knowing answers for whatit calls a ―million dollar question - what is inclusivegrowth and how to achieve it?‖ This paper proposes todefine inclusion/exclusion for an outcome scenario onbroad based growth from three different perspectives,viz., production, income, and consumption distribution.It also provides some illustrations based on theNational Accounts Statistics and the National SampleSurvey consumer expenditure distributions for the year2004-05. Continuing on this issue, in his paper titled―Pursuit of Inclusion in India: A Story of SpecificationErrors‖ (forthcoming in the Indian Growth andDevelopment Review, October 2009), M. H.Suryanarayana evaluates India‘s Five-Year Planstrategies to include the deprived in the developmentprocess since independence. This is a policy reviewpaper based on past studies. The paper argues thateffective policy formulation for inclusion and itsevaluation is conditioned by the available institutionalcapacity to generate and effectively utilise a soundinformation base. Using empirical illustrations basedon past studies, this paper shows that India‘s pursuit ofinclusion has been hampered because of the limitedappreciation of design as well as limitations inavailable information. This has led to a mechanicalpursuit of sophistication in policy formulation. This hasrendered both the implementation and an honestevaluation of the policy process difficult. This paperhas relevance for inclusive policy reforms and willopen up a debate, as well as future research, on theissues raised.Ashima Goyal (‗Incentive Structures for Growth withEquity: National Rural Employment GuaranteeScheme,‘ ICFAI University Journal of RuralManagement, Vol. I, No. 2, October, 2008, pp.1-26)argues that better delivery of public services and moreinclusion are critical for India‘s continued growth. Thenational rural employment guarantee scheme (NREGS)has been designed to achieve these goals. Its incentivestructures are examined, improvements suggested, andgeneral lessons for better governance drawn.Improvements include strengthening local institutions,and giving the local bureaucrat a long-term task(durable assets) as his objective. Normally a bureaucrathas to accomplish multiple tasks, but it is possible togive him a precise objective in the NREGS since theshort-term task (employment) is a sub-set of the longtermtask. NREGS also has the potential to re-vitalizethe tradition of voluntary labour associated withcooperative village management of the water economy,which may make it possible to extend the cyclicalNREGS.The threat of food inflation, that is, rising food priceshas received much public attention in recent weeks.Some political parties have demanded evenuniversalisation of the public distribution system(PDS). Of course, the government seems to be aware ofthe constraints on such a policy option as evident fromthe agriculture minister who has tried to explain themin terms of the huge procurement and buffer stockrequirements for the PDS and their adverseimplications for food grain prices and hence, for thefood security of the poor. Two broad issues have beenraised: (i) A case for universalisation of the PDS; and(ii) its implications for procurement and buffer stocks.The commentary by M. H. Suryanarayana (―Agflationand the Public Distribution System‖, Economic andIndira Gandhi Institute of Development Research 9