Incentives for small and marginal farmers suggested

 December 27: Dr C. Rangarajan, Chairman, Economic Advisory Council to the
Prime Minister has underlined the need for central banks of the developing economics
to be transparent and explicit with the objectives of growth and financial stability,
having price stability as their dominant objective.  “Tying central banks to a
specific target of inflation may be too restrictive, and many even be counter
productive”, warned Dr Rangarajan.

    He said maintenance of price stability at a level considered appropriate by
the central banks themselves was, perhaps, the best approach.   By maintaining price
stability a central bank can pave the way for fulfilment of other objectives as well
over the medium term.
 

    Dr Rangarajan made this suggestion in his inaugural address at the 93rd annual
conference of the Indian Economic Association (IEA) being held on the Panjab
University campus here today.    More than 3000 delegates from all over India and
abroad are participating in this three-day event.
 

    Dr Rangarajan said there was a raging debate going on currently on whether the
present financial crisis in the west was precipitated by monetary policy failure or
regulatory failure.  It has been agued that lax monetary policy led to low interest
rates which caused many distortions in the system culminating in the crisis.  The
macro conditions preceding the crisis which included low real interest rates due
to “Great Moderation” with a long period of very stable growth and stable low
inflation led to systematic underestimation of risks and very low risks premia in
financial markets.  He, however, said those who argue that the crisis was triggered by
regulatory failure point to lax regulation and supervision which led to increased
leverage, regulatory arbitrage, and less due diligence in loan origination.  He said
it was interesting to note that the country hit hardest by the current international
crisis – United States – had not formally adopted inflation targeting as its
objective.  On the other hand Canada or Australia which had formally accepted
inflation targeting had been affected very little by the crisis, he added.  
 

    Dr Sukhadeo Thorat, Chairman, University Grants Commission, and Professor of
Economics, Jawaharlal Nehru University, New Delhi in his presidential address stressed
the need to modify the nature of the growth to make it more pro-poor and formulate
policies to make farm and rural non-farm growth more pro-poor.  He said there was also
a need to strengthen the present pattern of agricultural growth by increasing the
support and incentive for small and marginal farmers.  The per unit growth in
agriculture brings greater decline in poverty or self-employed poor farmers than poor
non-agricultural households engaged in non-farm production and business, he added.  
The strategy for inclusive growth in the Eleventh Plan, he said, is not just a
conventional strategy for growth but it is a strategy which aims at a particular type
of growth process to meet the objectives of inclusiveness and sustainability.
 

    Earlier, the Panjab University Vice-Chancellor Prof. R.C. Sobti in his welcome
address informed the distinguished guests and delegates of the outstanding
achievements of the university and its remarkably high ranking status globally (387
among 500 leading educational institutions) and nationally in scientific research
(number one in India).  
 

    Prof. Sobti said by taking steps towards increasing the number of seats for
reservation for the Other Backward Classes for the students in the Panjab University
as part of university’s obligation under the Central Education Institutions Act was in
a way a tribute to the father of the nation, Mahatma Gandhi’s and realization of his
ideal of Swaraj.  He said the university has already received a grant of Rs.150 crore
for its development projects and hoped the UGC chairperson would use his good offices
in the early release of another 58 crore needed urgently.   A documentary of the
Panjab University prepared by the University’s School of Communication Studies was
also screened to the delegates which was highly applauded by all.  
On this occasion mementoes were presented to honour Dr. C. Rangarajan,
Dr. Anil Kumar Thakur, secretary and treasurer, IEA; Prof. M. Madaiah, former
president, IEA; Prof. L.K. Mohana Rao, Principal, Andhra University College of Arts
and Commerce, Andhra University, Vishakapatnam (AP); Prof. Sukhdeo Thorat, Chairman,
U.G.C. and President, IEA.; Prof. G.K. Chadha, Chief Executive Officer, South Asian
University, New Delhi; Prof. T.S. Papola, visiting professor, ISID, New Delhi; Prof.
H.S. Shergill, former Professor of Economics, Panjab University; Prof. R.C. Sobti,
Vice-Chancellor, P.U.; Mrs. Rangarajan and Mrs. Chadha; Mrs. Madaiah and Dr. Ajit
Singh from Cambridge University, U.K.
 

Prof. L.K. Mohana Rao, Principal, Andhra University College of Arts and Commerce,
Vishakapatnam and vice-president of Indian Economic Association read out the citation
    Prof. Sukhdeo Thorat presented the Sushila Thakur Merit Award for the Best
Women Paper Writer to Ms. Harwinder Kaur of Punjabi University, Patiala.  
    On this occasion various editions of Indian Economic Journal and so many books
on economics were also released by Prof. Sukhdeo Thorat.
 

    Prof. Thorat also released a book jointly written by Prof. Sucha Singh Gill,
Prof. Gurmail Singh and Prof. H.S. Shergill and a Souvenir of the Panjab University.  
 

    In his lecture, Dr. Anil Kumar Thakur, Secretary and Treasurer of the IEA
highlighted in detail the activities and achievements of Indian Economic Association.  
He said that the IEA had more than 4600 members in India and abroad, at present.
 

    The Indian Economic Association (IEA), the oldest and largest academic-
discussion-led body of economists in India, which was founded by Dr. Gilbert State,
Prof. C.J. Hamilton and Prof. Percy Ansely of the three Presidency Universities of
Madras, Bomaby and Calcutta in 1917, has become worldwide.  Its academic fragrance has
already crossed the boundary line of India.  ‘A study of Village Economics’ authored
by eminent scholar Prof. V.K. Kale was the first paper for the IEA.  The current
periodical ‘Indian Economic Journal’ was first published in 1952 by Prof. C.N. Vakil,
R. Bala Krishna and V.B. Krishnamuthi, and Prof. P.R. Brhmanda was a long service
editor of this esteemed journal.   Presently the Indian Economic Journal has reached
top ranking under the stewardship of Prof. V.R. Panchmukhi among academic journals.  
IEA’s former presidents include renowned scholars like Dr Manmohan Singh, Prime
Minister of India, Prof. Amartya Sen the Nobel Laureate, Prof. V.K.R.V. Rao, Prof.
G.S. Bhalla, Prof. G.K. Chadha and Dr I.G. Patel, all eminent economists.  Prof.
Sukhadeo Thorat, Chairman, University Grants Commission is the President of Indian
Economic Association currently.  First time, 43rd Annual conference was organised on
PU campus in December 1960 and then 78th annual conference of the IEA was held in
December 1995.  
 

    Prof. Gurmail Singh, chairperson, department of economics and local organising
secretary of the conference proposed a vote of thanks.
 

Press Note No.676
                                                          AK/PS