Opinion ‘We should not ignore the criticality of GDP’

Anyway,why do I say it is a good time to at least pose this question of limits to growth? Between 2003-04 and 2010-11,the Indian economy has averaged an annual rate of real GDP growth of 8.5 per cent,an unprecedented achievement. The Planning Commission is setting a target of 9 per cent plus growth rate for the 12th Five Year Plan that commences in April 2012. I know many social scientists knock the idea of GDP growth as a measure of progress and even some Nobel Prize-winning economists like Amartya Sen himself and Joe Stiglitz have written eloquently on the need to shed our obsession with high GDP growth as presently defined.

But while we must acknowledge its limitations as a measure of progress and welfare,the fact remains that GDP growth is the most convenient and most widely used single index of the dynamism of a country’s agricultural,industrial and services sectors.

I entirely agree that we should not be overly obsessed with high GDP growth but neither should we ignore its criticality particularly as an instrument to create more jobs and to generate more revenues for the government to invest in both infrastructure and social welfare programmes. Let us not forget that the Mahatma Gandhi National Rural Employment Guarantee Act which is today the world’s largest social safety net programme would simply not have been possible without the proceeds that the growth process generates.

…Where will the limits to growth emanate from?

…I would suggest that the time has now come for India to look at the limits to growth not just from a macroeconomic point of view but also from an ecological point of view. Incidentally,this was one theme running through the original Club of Rome study but over the years we seem to have lost sight of it.

We do not have to subscribe to the apocalyptic vision of the Club of Rome because over the past three decades technology has undermined many of the its predictions — the most famous of which being we will run out of oil by the turn of the 20th century. Incidentally,technology has also made nonsense of the dire predictions made in the 1960s about India becoming a food basket case. But we do ourselves no favour if we don’t even try to pose the limits to growth question from an ecological perspective and then try to assess what the 9 per cent+ growth means for our water resources,our forest wealth and indeed for our entire and very variegated and rich biodiversity.

But why now particularly? Can’t we wait for a decade,grow and then deal with its ecological consequences? Can’t we follow the American or even Chinese approach of “harness growth gains now,bear growth pains later”?

There are many reasons why India has to be different.

First,ecology in our country is not just a matter of lifestyles as it is in the developed countries but of basic livelihoods….

Second,already,the public health effects of development paths followed over the past have become visible…

Third,the impacts of ecological damage on environment are better understood today than at any time in history…

Finally,there is the stark reality that India will add another 400-500 million people by the middle of this century. Many advanced countries confront population declines,while it has been said that China faces the prospect of becoming old before becoming rich like the West. But the demographic momentum in its magnitude certainly is unique to India. And sustainable development,after all,is development that “meets the needs of the present generation without compromising the ability of future generations to meet their own needs.”

…You are all social scientists and bring a valued perspective to the problematique of economic growth and ecology. What I would like to stress to all of you is that your perspective should be free from prejudices,if not passions. I find,unfortunately,a bias against economic growth and technology in the social science fraternity at large. I would expect all of you to be tough and searching critics sensitive to larger social concerns but please do not become vociferous techno-phobes or growth-sceptics. Thanks to that outstanding symbol of technology and growth — the Internet — India is seeing the emergence of a well-networked community of neo-Luddites. But remember that even the much-reviled Luddites were very selective in their approach in the 18th and 19th centuries when the Industrial Revolution was at its peak.

Excerpted from the convocation address to the students of TISS,Mumbai on May 11,2011