- Global Management Program
- Stanford Graduate School of Business and the Indian Institute of Management (SAIL) exchange program
- Slideshow: IIM(B) Students Visit to Stanford (December 2007)
- Center for Global Business and the Economy
FOR FURTHER INFORMATION: Helen K. Chang, 650-723-3358, Fax: 650-725-6750
India’s Economic Growth is Missing the Poor
April 2008
STANFORD GRADUATE SCHOOL OF BUSINESS—Amartya Sen knows that the economy is booming in his native India, but the Nobel Prize-winning economist and Harvard professor said he isn’t seeing enough widespread benefits for a country whose income essentially has doubled in nine years.
“To say, ‘There has been some progress,’ would hardly be an adequate criterion,” he said at a recent informal lunch at Stanford Graduate School of Business, sponsored by the Global Management Program and the School’s international student exchange program with the Indian Institute of Management. “Is poverty being halved? No. Is literacy being doubled? No. The question is: Are the poor getting richer at an adequately fast rate? The answer is emphatically: No.”
Improving child mortality rates, providing basic health care, and increasing literacy are among the major concerns of the 73-year-old economics and philosophy professor. In fact, he used much of the money he received for winning the 1998 Nobel Prize in economics to set up the Pratichi Trust, which helps with elementary schooling and health care in India, as well as gender equity in Bangladesh.
“If your public revenue is growing at 10 or 11 percent a year, and if money is coming out of the ears of the government in India, I’d like to see the allocation increase” for human services, Sen said. “It requires more allocation in areas that have been traditionally neglected, and it also requires better organization, which has been lacking.”
He said outsiders might see how many people in India have gotten high-paying jobs in information technology, for example, but not realize how few other opportunities there are. “Only about 5 percent of the population has any chance of leaving school and going anywhere high up. Think how much more you could get if you had 100 percent covered in that net.”
For the masses, India’s economic benefits can seem like a myth. “They could be shared much more widely if the access to economic participation is expanded,” Sen said. “What holds Indian participation down is lack of good education, lack of good health, lack of basic resources.”
The economy is not nearly as diverse as it should be, he said. “When I look at my desk, I have a little handheld calculator made in China, I have paper clips made in China, I’ve got a stapler made in China, I’ve got a little clock on one side made in China—and these generate a lot of employment and income.”
But instead of having entrepreneurs in fields that could create jobs, too many of India’s brightest are in a few areas, such as technology. “One of the reasons why they’re concentrated,” Sen explained, “is because our schooling is so bad compared to China.”
India would benefit, he said, from more accountability. Absenteeism can be rampant among teachers and health care workers, and school inspectors have little clout, Sen said. He wants labor unions to push members to improve the standard of living, and for the government to pressure them if they don’t. Sen also has met with PTAs to get more effective monitoring of teachers and students.
Despite his concerns about the overall economic system, Sen said it’s important for the government and citizens not to be so frustrated by problems that they stop trying to make India better.
“The easiest rhetoric in politics,” he said, “is to say the rich are getting richer, the poor are getting poorer, we’re pouring money in, nothing much is happening. It’s all a waste. And so on. But none of this is true. What is true is we can pour more money in, and none of it will be wasted.”
David Murphy
