Why Growth Matters by Jagdish Bhagwati Read Free Book Online Page A

mostly by redistributing it in their favor through outright fraud in collaboration with politicians, rather than by creating it. 8 But the allegation is not persuasive. Unlike Mexico, for instance, where the billionaire Carlos Slim Helú has used every conceivable means to generate monopoly profits for himself, most Indian entrepreneurs have become rich by creating wealth while operating in a highly competitive market. Recent empirical work by Alfaro and Chari (2012) also points to the existence of a highly competitive market in India with substantial entry of new firms on the margin. To be sure, one can find examples such as those of the Reddy brothers, who, according to their recent indictment, have accumulated wealth from illegal mining; but that is not the case with the vast majority of Indian entrepreneurs from the information technology, telecommunications, pharmaceuticals, or engineering goods industries.
    So, while the American Gilded Age produced Rockefeller and Vanderbilt, India today has given rise to Narayana Murthy of INFOSYS, Azim Premji of WIPRO, and Uday Kotak of Kotak Mahindra Bank. There is not a hint of corruption or shady practices among these successful tycoons. All of them are associated with extensive engagement with society, and have embraced corporate social responsibility and private social responsibility. Whereas Carnegie and Rockefeller gave away their fortunes on their death, the Indian tycoons have given away massivesums of money even as they have earned them. Besides, their lifestyles are simple, not extravagant.
    While the tycoon Mukesh Ambani has built a much-condemned high-rise in Mumbai, the display of personal wealth and gross materialism is far less rampant in India than in nineteenth-century America or in the New York of the 1970s prior to the current crisis and even after the financial sector’s recovery. Perhaps the worst displays take the form of flamboyant and unseemly weddings costing millions, but that is a long-standing cultural tradition.
    While, therefore, India is not a throwback to the American Gilded Age, one might ask: What about China? Here the parallel is closer. Union rights are nonexistent; ostentatious displays of wealth are common; and there is little attempt at corporate and personal social responsibility. So here again India scores against China and handsomely at that.

Chapter 5
Reforms and Their Impact on Health and Education
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    T here is one final area of criticism that has been leveled at the reform programs that have liberalized the economy and promoted growth: that they have failed to promote education and health. Critics have suggested that India lags behind much poorer countries in these areas; that states such as Kerala, which chose an alternative path, have performed much better; and that states such as Gujarat that have relied on growth have fallen short of satisfactory progress. But these assertions are little more than myths that fail to stand up to careful analysis and examination of data.
Myth 5.1: Poverty may have come down but India scores poorly on health even when compared with much poorer countries .
    Recent focus of the media on child nutrition indicators, which place India below virtually all sub-Saharan African countries, has created the widely shared impression that India has performed poorly not just in nutrition but in health in general relative to these countries.
    On the one hand, India is compared by the critics with much richer China and to significantly poorer Bangladesh to drive home the message that whether one takes rich or poor countries for comparison, India is a serious laggard in health achievements despite growth and successfulpoverty alleviation. 1 But these inferences are plain wrong. India is by no stretch of the imagination an exceptional underachiever in health generally. In fact, India is hardly out of line with other countries with similar per capita income levels. Moreover, when countries with similar or lower