Can economics be of the people, for the people and by the people? (Mint)

• Mains Paper 3: Economy 
• Prelims level: RCTs
• Mains level:  Economic growth, development and responsibility 

Context:

• Abhijeet Banerjee, Esther Duflo and Michael Kremer’s Nobel Prize for ‘randomised control trials’ or RCTs brought back fond memories of our Masters in Gokhale Institute of Politics and Economics. 
• After the announcement of the Nobel Prize 2019, there was a lot of replugging of articles written by people who disagreed with the RCT and the results it produced. 
• As the saying goes, if you put two economists in a room, you will get two opinions, unless one of them is Lord Keynes, in which case you would get three opinions. 

Example:

• Privatisation of hospitals could require a broader analysis in the context of the implementation of Ayushman Bharat, but providing vegetarian or non-vegetarian food to students is more likely to be area-specific – small and manageable problems, as they are called.

Idea of Nyay programme:

• In that context, Banerjee’s role in ideating the Nyay programme – giving 72,000 a year to the poorest (Rs 6,000 a month) – was a prominent election plank for the Congress. 
• All and sundry criticised that it will mean higher taxes for corporates and high networth individuals. 
• Well, the latter has already happened, and the corporate sector got relief only after the economic growth rate started faltering.

Case study:

• Telangana Chief Minister K Chandrashekhar Rao’s Rythu Bandhu scheme, which provides Rs 5,000 per acre per season has been a huge success. 
• It has boosted consumption, and the state is one of the top ones in goods and services tax collections and needs minor or no compensation from the centre. 
• So, money at the hands of the people is working. And KCR is a winner, politically.

Way forward:

• If Congress really wants to show to people that it was serious about Banerjee’s proposal on Nyay, it should implement it in the five states – Punjab, Rajasthan, Madhya Pradesh, Chhatisgarh and Puducherry - in which it is in power. 
• The resource is a question. But state government can raise money through bonds, and if consumption is revived, tax collections follow. It can also be targeted and done in phases.
• This would strengthen the view that like democracy, economics can be of the people, for the people and by the people.

Online Coaching for UPSC PRE Exam

General Studies Pre. Cum Mains Study Materials

Prelims Questions: 

Q.1) Which of the following organisations has recently launched India’s first web repository documenting air quality studies done in the last 60 years?

A.     Centre for Science and Environment 
B.     Indian Institute of Tropical Meteorology, Pune
C.     Environment Pollution (Prevention and Control) Authority
D.     None of the above.

Answer: D

Mains Questions:
Q.1) Can economics be of the people, for the people and by the people?