Sen Bhagwati Debate on Growth Model – UPSC GS3

Amartya Sen Model:
Sen is a Nobel Prize winner in economics. In the book ‘An Uncertain Glory: India and its Contradictions’, Sen and Drèze prescribe state-led redistributive efforts as the solution to India’s problems.
  • Sen believes that India should invest more in its social infrastructure to boost the productivity of its people and thereby raise growth.
  • Investing in health and education to improve human capabilities is central to Sen’s scheme of things. Without such investments, inequality will widen and the growth process itself will falter.
  • Sen said that both growth and welfare programs are needed, and not at the cost of each other.
  • Sen attacked Bhagwati’s arguments by saying that in an under-nourished country such as India, it was very stupid to focus obsessively on growth.
Bhagwati Model:
Jagdish N. Bhagwati is a University Professor of Economics, Law, and International Relations at Columbia University and former Adviser to the Director-General of GATT. In ‘Why Growth Matters: How Economic Growth in India Reduced Poverty and the Lessons for Other Developing Countries’, Bhagwati and Panagariya hold up growth as the panacea for all of India’s ills.
  • Bhagwati argues that only a focus on growth can yield enough resources for investing in social sector schemes.
  • Bhagwati argues that growth may raise inequality initially but sustained growth will eventually raise enough resources for the state to redistribute and mitigate the effects of the initial inequality.
  • Bhagwati argues that by providing the intellectual foundations for populist excesses and fiscal profligacy that stoke inflation, Sen is actually hurting the life chances of the poor. By arguing for redistribution to precede growth, Sen is putting the cart before the horse, Bhagwati says.
  • Bhagwati argued that it is the reforms of 1991 that have made even the lowest social classes greatly more prosperous today. Hence, those reforms must be strengthened. Critiquing the critics of India’s growth experience, Bhagwati argued that a low rank on the human development index (HDI) did not mean much.