The Hindu Business Line : Indian economy

This is with reference to "Economy to grow by 8.1 p.c in `03-04" (Business Line, February 10). Though the advance estimate of CSO that the Indian economy will grow by more than 8 per cent is promising, in no case should it be a reason for complacency for the government.

The slide of India in the Human Development Index ranking from 124 to 127 is ample testimony to the fact that excessive emphasis on GDP growth will result in deterioration of other developmental areas.

The Human Development Report of the UN has shown that high GDP growth and the economic attainment of a nation need not always be correlated.

Moreover, a widely accepted economic relationship called "Okun's Law" suggests that when unemployment is low and falling while GDP is expanding rapidly, higher inflation cannot be far behind.

It is, therefore, high time the Centre focussed its monetary and fiscal policy on developmental areas of economy such as employment generation, poverty alleviation and so on.

C. Ramesh,

Keeramangalam (TN)

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