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Essays On Inclusive Growth by C.H.Hanumantha Rao;  Published by Academic Foundation ; Pages 292 ; Price Rs. 995/-

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Hanumantha Rao is Chancellor of the University of Hyderabad .He was a distinguished member of the Seventh and Eighth Finance Commissions, Planning Commission, Economic Advisory Council to the Prime Minister and of the Central Board of Directors of R B I. He was connected with a whole host of Committees. He bagged the Financial Express Award for Lifetime work in the field of Economics. A grateful nation honoured him with the Padma Vibhushan.

The book under review draws pointed attention to how rising regional disparities in development and slow growth of agriculture, rural non-farm sector and manufacturing combined with scant attention to health care and education resulted in increasing income inequalities and rural distress. The Twelfth five Year Plan gave a conceptual framework for achieving inclusive growth through reduction in regional and intra-regional disparities in development, step-up of  growth of agriculture and manufacturing.

The book is a testament to the faith of one man in finding a solution to the problem of inclusive growth. There are 49 chapters , 28 of them dealing with deficiencies in infrastructure, technological fatigue, marketing constraints and sustainable use of water or irrigation.

The First Section is devoted to “ Growth and Inclusiveness “ and has eight chapters. The global financial crisis left India fairly untouched because of prudent management of the financial sector by the   R B I. Also due to harmonizing of reforms in the financial and  external sectors along with progress in fiscal and real sectors. What is called for is inclusive growth and measures for raising domestic demand that provides a safety net against the vagaries of global markets.

Governments, both Central and State, stepped up public investment in infrastructure and other expenditure on agricultural and social sectors leading to a high G D P  growth. Rao stresses the need to evolve a more comprehensive and active social policy to facilitate inclusive growth and arrest inequitable distribution of gains from growth. Further, he emphasises that financial inclusion is indispensable for achieving inclusive growth.

Economic reforms to be successful have to become participatory, especially at grass roots level to improve both efficiency and astute management of natural resources.

                                                                                                                                                    One chapter concentrates on the comparative experience of rural transformation in India and China and emphasizes the role of socio-political factors in accentuating in income inequalities in the wake of globalization. The social change under way in India is faster than before thanks to the rising awareness of the common people.

The Second Section is dedicated to “Agricultural Growth and Sustainability “ and has 11 chapters. The chapter on “ Crisis in Agriculture” is a masterly analysis of the ramifications of this critical area in our country. The neglect of the agricultural sector became evident during the early 1980s. Public investment had started declining. The concern for backward regions and for small and marginal farmers was fading away. “The Green Revolution” era touched only the developed pockets of the country. Declining growth of agricultural output, sinking profitability and burgeoning rural unemployment were the reigning forces. Indebtedness of farmers increased, especially from informal sources. All this led to a spate of farmers’ suicides—which is analysed in a full chapter. Much needs to be done to instill confidence among the vulnerable groups of farmers Effective implementation of Employment Guarantee Scheme will mitigate rural distress by raising the incomes of the poorer people in rural areas and improving their socio-economic position and their bargaining power.

Prof. Rao has highlighted the importance of biotechnology for raising productivity of crops and animals and lending stability to yields. Another crucial subject is Agricultural Prices and here the author recommends that our approach should be from the point of agricultural development, overall economic growth and social justice. Efficient allocation of resources is one of the major functions of agricultural prices. Agricultural pricing is essentially an exercise in balancing / reconciling the conflicting objectives cutting across sectional interests viz.,farmers interests, manufacturers’ interests, consumer interests, etc.

An excellent chapter -- “ Strategy for Soil and Moisture Conservation through Watershed Development”  is dedicated to Prof A.Vaidyanathan—who is the foremost authority on the subject. Watershed development aims at protecting the livelihoods of people inhabiting the fragile eco-systems experiencing soil erosion and moisture stress, Scientific watershed development can lead to conservation of natural resources and easing pressure on such resources.

Section Three is dedicated to Andhra and has four chapters that give a succinct analysis of Andhra during the last fifty years—its rate of growth, potential of agro-business and a detailed analysis of the major issues in land reforms.

“Telengana ‘ –the new State has been covered in Section Four and has five chapters. The SriKrishna Committee which dealt with the demand for a separate State is analysed in depth. Scales of justice got tilted against Telengana on account of vehement opposition from Seemandhra and the Committee’s own fears about the demands for smaller States cropping up as well as Telengana becoming a stronghold for Naxalism and religious fundamentalism. Prof.Rao has provided  an acute analysis of the problems faced by the fledgling State.

A delightful Section is “Some Reminiscences”. We have a lilting account of the author’s interaction with prominent politicians like Indira Gandhi,  Narasimha Rao, etc. Intellectually pleasing are the accounts on Sukhamoy Chakravarty, P.C.Mahalanobis, Abid Husain, etc.

This is a volume to be carefully read and dipped into often for its intellectual vigour and to learn of one man’s dedicated efforts to lift the downtrodden.

Tit  Bits

 Rajiv Gandhi during a meeting of economists, members of the Planning Commission and government officials declared “… with all respect to the senior economists present here, I would like to mention a saying that economists are those who are heavily paid for making forecasts which often go wrong “. At this, Dr.Raja Chelliah who was equally forthright and relaxed gently retorted, “Sir, since we are not paid heavily our forecasts can never go wrong’”The PM greeted the remark with a heavy laugh. ( Page 229)

P.P.Ramachandran.

26 / 02 / 2017