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'PM's focus on market has dangerous blind spots'

business Updated: Aug 04, 2012 17:53 IST
Lord Bhikhu Parekh

UK-based economist Lord Bhikhu Parekh has said Prime Minister Manmohan Singh's "one-sided approach on the market" could be risky.

Parekh, who released a book -- Economics, Policy and Development, An Intellectual Journey -- written by former RBI governor Dr IG Patel in Vadodara on Friday night, said PM was pinning all hopes on the market, and "this approach is one-sided and has its dangerous blind spots".

At the same time, Parekh said the approach of Jawaharlal Nehru, that laid stress on the State, and that of Mahatma Gandhi, which focused on the civil society, too were similarly unidimensional and had pitfalls.

The three agencies of the social and economic change --the state, the civil society and the market -- have equally vital and independent roles, Parekh said.

While relying on the state alone leads to centralisation and stifles entrepreneurship, reliance on civil society encourages fragmentation, lacks national coordination and leads to "middle class domination of all significant activities", he said.

A pure market-centric approach to economic and social problems helps only those with the purchasing power, and leads to the corporate takeover of the state, he said.

If the four major corporate houses unite, they can dictate terms to the government, he added.

"In India we initially relied on the state alone, and are now putting all our faith in the market...," he said.

The MNREGA job scheme does not build up people's capacities, and is not tied to well-worked out projects of common interest, he said.

Poverty is a national disgrace and it intensifies communalisam and casteism because it is high among the lower castes and Muslims, Lord Parekh said.