Addressing a press conference here on Saturday, Sen said, a boom in the stock markets influences only a tiny section of the population and the vast masses are left out. "Near complete neglect of social issues is the greatest weakness of the Indian economy. Though some positive changes have taken place in this direction in the past few years, a lot more need to be done," he said. While measuring economic development, he said, one should have to look at solid bases and not at something like boom in the stock markets.Sen believes that India has both advantages and disadvantages in reaping the benefits of globalisation. To derive maximum benefit from globalisation, India need to produce goods of international standard and develop highly knowledge-based industry. But in a country like ours, where nearly 50 per cent of the populationcannot read and write, such products and industries could not be developed.

Asked about his views on the recent buoyancy of the economy in general and the stock markets in particular, he said while the upbeat stock market would attract investment, it would benefit only a few. The basic weaknesses in the economy, however, were present in high measure as the country still had a long way to go in the areas of primary education and healthcare.

Pointing out that economies like Japan, China and Taiwan had been able to build the foundations of the market economy by expanding social opportunities, he said ``the Indian economy must have a social base in future''. China, on the other hand, could derive much benefit from globalisation as it was much advanced in terms of universal education and healthcare. In other words, owing to lack of social opportunities, India could not utilise the opportunities offered by globalisation, he said.

Speaking of the economic impact of the Indo-Pak war, the Nobel laureateeconomist said that the effects of any kind of war would be negative in poor countries such as ours. But the damage would be more for Pakistan because it was poorer than us, he added. However, he said, "Pak damage is no consolation for India." Sen said the conflict would lead to a shift of our priorities from economic to military issues and cautioned that higher defence expenditure would be a major drag on India's social and economic advancement. He said that military strength alone cannot ensure security and stressed that nothing other than economic strength could provide more security.