Look at the bottom of the heap: Kaushik Basu

The economic growth of the bottom 20 per cent of the population should be studied to gauge the real growth, according to Kaushik Basu, professor of economics, Cornell University. He said that the country must wake up to the importance of the Intellectual Property Rights (IPR) regime.

He was speaking at the National Council of Applied Economic Research. Montek Singh Ahluwalia, Deputy Chairman, Planning Commission, was the chief guest at the forum.

Kaushik Basu pointed out that during the past decade, from 1991 to 2001, literacy rates grew from 52 per cent to 65 per cent, the largest quantum in terms of percentage points since the 1950s.

In terms of absolute numbers, people below the poverty line have decreased, but hastened to point out that over 30 per cent of our rural population and 25 per cent of the urban population are still below the poverty line.

While cautioning that corporate India has been surging ahead and that the country had made a brand in the software industry across the world, he urged economists to study the growth of the bottom 20 per cent of the population. He said that those people in "deep poverty" were the ones most affected by floods, droughts and malnourishment.

He admitted that no clear statistical data was available as the consumption and income patterns of this segment of the population was not clear.

Basu said that there is a "diffused link" between the macro- economic policies and the poor. It was important that the policy makers not subvert policy for the rich. He emphasised that the growth, post-1990s, could not be attributed to a single factor, but a multiplicity of factors.

He pointed out that during the 1960s the savings rate was at 12 per cent, which increased to 22 per cent in the late 1970s, subsequently the growth rate picked up. He indicated that the reforms, initiated in 1991, cashed in on the high savings rate in the earlier years.

Since 1998, the government had its savings in the negative. He emphasised that the government should put the fiscal house in order.

Comparing figures on the number of patent applications in US vis-à-vis India, he said that the intellectual property rights regime coming into force across the world is as important as land Titling prior to 1947. he said that a country must wake up to the fact that "rights over tomorrow's production are being settled today".

In 2002, US had 190,907 patent application as opposed to a dismal 234 application in India. The patents in scientific application fared better, while US had 1,63,526, India had 9,217.

Speaking about the Common Minimum Programme of the government, he said that it was important to contextualize administrative reforms in the larger political-economic reality.