High growth doesn’t result in trickle-down effect, says economist Bhaduri

MANGALORE: High growth leads to trickle-down effect is a fallacy, but unfortunately, this is the accepted philosophy across political spectrum, rued economist Amit Bhaduri.
He was speaking at the 'BV Kakkilaya inspired orations 2014’ on the subject ‘Nationalism and economic development in the era of globalisation’ at Ravindra Kalabhavan, University College here on Saturday.
The Professor Emeritus at JNU, Delhi, said the government’s neo-liberal policies supporting corporate-led industrialisation has spawned neo-rich in the last decade.Citing the Forbes list, he said the dollar billionaire figures jumped from eight to 52 and of these, at least 30 neo-rich are like Reddy brothers, who have exploited natural resources to their advantage. This is that part of the Indian story which no political party is ready to face, he noted.
Supporting his argument against high growth philosophy, Bhaduri noted that lack of employment creation, welfare measures and doling out trillions of dollars of incentives were the reasons that trickledown effect has not happened in high growth economies.
He also said that political parties need large funds to fight polls and funds come from corporations and this is how neo-liberal policies are framed.
The governments always believe that market has solutions for their problem, but the truth is that political problems do not have economic solutions in market, Bhaduri observed.
It is not the market that speaks for privatisation, but the neo-liberal agenda with the hope that it can eradicate poverty, bring about food security, ensure health care, education etc, citing former Finance Minister P Chidambaram’s example, who had stated that privatisation was the solution to all ills of the society. ‘‘In that case, why do we need a minister or government,’’ he questioned.
The talk was organised by Hosatu, Bangalore, MS Krishnan Memorial Trust, Bangalore, Department of Economics, Mangalore University, Planning Forum and Research Forum, Mangalore University College.