ONE of India’s most respected economists who is referred to as the Father of Tax Reform by his peers, Dr Chelliah made a salient contribution to every major aspect of Indian public finance during his lifetime.
One of his lifelong concerns was the eradication of India’s poverty, so he introduced a new approach – one, he thought about poverty always in terms of a spatial dimension and second, he was willing to trade-off a little of growth to make a major impact on poverty reduction. Probably it was the realisation that while growth rate had picked up by the mid-1990s and was averaging above seven per cent per annum, the dent on poverty was limited. He also saw that while southern and western states were doing well, participating better in the growth process through more effective policies in place for education, it was the central, northern and eastern regions that were lagging in both growth performance and poverty eradication. Directing investment in these regions may involve sacrificing a little efficiency and aggregate growth of the Indian economy, but unless the sprawling regions of Uttar Pradesh, Madhya Pradesh, Bihar and Orissa were brought on board, the impact of growth on poverty was going to be always limited. He discovered that focus on short-term benefits could not lead to eradication of poverty as it required a long-term strategy and perspective.
While stressing on the need to ensure that globalisation does not affect our independence or the conditions of the poor people, the book tries to explain the causes for our failure in getting the low-growth states to move forward and argues that unless the approach and methods are changed substantially, we will not succeed in transforming the low-growth states.
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