Amit Bhaduri is a distinguished economic theorist. He has been a consistent critic of mainstream neoclassical economic theory and the corporate-led growth strategies that have emerged in India and other developing countries in the wake of globalisation. He has been articulating alternative development strategies that seek to mobilise the strengths and energies of the poor masses who are currently disenfranchised and excluded from the growth process. His books include Development With Dignity (2005), and The Face You Were Afraid To See (2009). He is currently an internationally selected professor at Pavia University, Italy, and a visiting professor at the Council for Social Development, New Delhi.
Bhaduri's technical work has focused on distribution of work, growth and employment generation in the Indian economy. He has also studied agricultural backwardness under 'semi-feudalism'. In this interview, he criticises India's current model of economic growth, and points to the areas overlooked by the myopic economic orthodoxy.
What are your views on Indian economic policies in recent times?
What is quite fantastic is the convergence of views across political parties in India about economic policy. Whether the CPM [Communist Party of India (Marxist)] or the BJP [Bharatiya Janata Party], when they are in power, they all follow the same policy. There are two points to understand here.
First, why did all parties come to the same conclusion? It's because they all believe that the investment climate in the country has to be maintained. During the Nehru period, the Indira Gandhi period, and roughly up to V P Singh's prime ministership, the state was responsible for economic policy and its consequences. Now, it is the private sector. This change was brought about by creating an investment climate for corporations. Now in a country where there are so many poor people with little purchasing power, without roads and electricity, the only way to maintain the investment climate is through a massive transfer of natural resources at cheaper prices. Water, electricity, land and minerals are given away to corporations. This has now become the name of the game. The second aspect is that the government is crippled because it withdraws from all profitable activities. Activities for the social good like basic education, healthcare, water and public utilities are privatised and converted into profitable activities. This to a large extent is the common policy. It is achieved by not allowing the government to have an active fiscal policy, or active budgets. However, there is nothing in economics or the empirical data that shows that a higher or lower budget deficit increases or decreases the inflation rate. Nothing at all. Along with an investment climate, a climate of opinion that the fiscal deficit has to be kept down is simultaneously created. This entails that the government cannot spend sufficiently on education or employment guarantee. Also, these activities are implemented through the government instead of decentralising them, so that they can be stopped or diluted at convenient times. These are the two main planks on which almost every political party agrees. The 2003 Fiscal Responsibility and Budget Management Act which says that it is the government's responsibility not to increase deficit, is supported by every party. But it is not the government's responsibility to see that the citizens of this country have enough food to eat.