Economics (Answer 2 questions) Essay Example | Topics and Well Written Essays - 750 words

Economics (Answer 2 questions) - Essay Example For instance, the procurement price for wheat and rice rose to 170 and 240 by 1980 (taking the base at 100 in 1970). Thus, there has been a substantial rise in the procurement prices of these commodities with a view to placate the rich farmers who form one of the dominant groups. Next, the license and control mechanism called by many derisively as the â€Å"Inspector Raj† placed undue emphasis on stifling the innovative and entrepreneurial tendencies to favor the few industrial houses that controlled the economy. The resulting contraction in industrial output has been shown as a result of these policies by Bardhan. The third dominant group, the professionals have managed to retain their supremacy in knowledge and allied interests by making sure that they have high â€Å"scarcity value† in a country where the overwhelming majority are illiterate. They have done this by making sure that resources are diverted from initiatives that provide for mass education to higher education schools and colleges where the elite minority can get admission. However, it is not always the case that these dominant groups act in unison or are hand in glove with each other. There have been instances where the rich farmers have found themselves in opposition to the bureaucrats and the professional class particularly when it came to the distribution of largesse by the government in the form of subsidies and the like. Thus, there have been conditions where the dominant groups have found themselves in conflict with each other. 2) It a long held belief pioneered by Jean Dreze and Amartya Sen that social indices of development are a better guide to the overall development of an economy than purely economic indicators. This fact has been reinforced by many studies that point to the emergence of so-called â€Å"Tiger Economies† of South East Asia by investing in human and social capital. Dreze and Sen argue that even in India,