Friday, July 27, 2012

India's New Development Agenda by Dr.N.A.Mujumdar

India’s New Development Agenda by Dr.N.A.Mujumdar ; Published by Academic Foundation ; Pages 223 ; Price- Rs 895/-


                                             Dr.N.A.Mujumdar is an authority on Agricultural Economics and is currently the Editor of the Indian Journal of Agricultural Economics and the Honorary Professor at the Society for Development Studies. He was  Principal Adviser, Reserve Bank of India and Lecturer in the highly respected School of Economics of the University of Bombay. The I.M.F appointed him as Adviser to the five Central Banks of Zambia, Mauritius, Belize and Cambodia. He is author of a number of books including two volumes on Indian Agriculture.

                                               Ours is a defining moment in the history of the global economic system. The 2008 collapse of the capitalist model of the American economy was as traumatic as the crash in 1991 of the Russian communist model. India discarded the centrally planned model and adopted the capitalist model since 1991. Where do we go from here?.

                                                 The book under review is an attempt to convince us that we must grow up from the conventional growth economics trapped in market theology to resonate to larger concerns of holistic development. The author has assembled thirty of his articles and speeches at different fora. He pleads for a broad-based, decentralized growth which would facilitate access by the poor to employment, food , nutrition and health and quality education and ensure safety nets that reduce the vulnerability of the poor—all these efforts resulting in  a value-based society. 

                                                 The analysis in the book proves beyond doubt that the economic reforms introduced in 1991 diluted the development content and reforms soaked in market theology went further degenerating  into anti-development instruments. Unbridled market philosophy during 1991—2004 had a negative impact.

                                            The book is divided into five parts. The first part dealing with approaches to development has nine articles. All those involved in development of our economy have to re-think their strategies in response to the new emphasis given on “inclusive growth”. The essay on ‘Sustained Development’ emphasizes that intra-generational equity is as important as inter-generational equity. Sustainable development is a co-operative enterprise in which both public and private enterprise have a role to play. Public and private—community-centred development is the key to sustained development. Three core issues in the present financial scenario are —Inclusive growth or broad-based decentralized growth in the real sector, New architecture of the financial system to facilitate such growth and the Inequitable interest rate structure. These must be tackled vigorously for India to progress.

                                                 The second part of the book is devoted to the Financial Sector reforms and incorporates three essays. There is a cogent analysis of financial inclusion which demands a systemic perspective on the part of the players. The High Level Committee on Financial Sector Reforms under the Chairmanship of
 Prof. Raghuram Rajan has come in for a severe drubbing by the author. “The recommendations of the Committee are based on amateurish understanding of the Indian economy. The Committee has failed to address the basic issue of how to reshape the financial system to promote inclusive growth. The Report belongs to the genre of IMF / World Bank reports, characterized by excellent presentation, obsessed with market theology and marked by a sense of superciliousness. The authors of the Report lack a sense of Indian economic history”.—a stern indictment indeed. Incidentally, the Committee did not include a member from R B I.

                                              “Monetary and Credit Policies” form the subject matter of part three and has ten essays. There is a critical analysis of policies in the post-reforms period and a stirring call on the part of R B I  to evolve a blueprint of area-specific plans to facilitate banks and financial institutions to promote inclusive growth in the real sector. A number of essays analyse credit and monetary policies during 2007—2009.

                                                    The fourth part is concerned with global crisis and India and has six articles. Three of these analyse the role of R B I and the author quotes Nobel Laureate, Prof. Joseph Stiglitz—“Our ( U.S ) financial system collapsed because we did not have a Dr.Reddy at the helm.” There cannot be a better tribute to the management of our banking system.

                                                    The final part is dedicated to the Agricultural Sector and has two articles. It draws pointed attention to three issues—(i)-Exports of foodgrains, (ii) Foodgrains management and (iii) Watershed development.

                                                     This is a book bursting with radical ideas and presents an incisive analysis of our problems. It is warmly commended to all students of agriculture, banking and central bankers.


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