Economic Graffiti: The view from Palanpurhttps://indianexpress.com/article/opinion/columns/the-view-from-palanpur-christopher-bliss-nicholas-stern-5779621/

Economic Graffiti: The view from Palanpur

The experience of Palanpur offers useful tips to India — importance of education, human capital, vocational training, need for greater connectivity

This new book provides a keen, bird’s eye view of research in rural India, with scholarship and a lightness of touch, rare in economics.

Palanpur, with a population of barely 1,255 individuals, clustered in 233 households (2008 data), is a nondescript village in the Bilari Block of Moradabad district, Uttar Pradesh, some 220 kilometers east from Delhi. The residents belong to various caste groups — Thakurs, Muraos, Jatavs — and are pre-dominantly Hindus, though about 10 per cent of the population is Muslim, themselves broken up between two castes — the Telis and Dhobis.

None of this makes Palanpur special. What makes it special is that, despite being such a run-of-the-mill Indian village, Palanpur is such an iconic name. This happened because in 1973, two young British economists, Christopher Bliss and Nicholas Stern, put up a proposal to do a detailed study of the village. From September 1974 they began their research, spending long stretches of time living in the village, somewhat akin to what anthropologists do. This resulted in the publication Palanpur: The economy of an Indian village in 1982. I was then living in Delhi and teaching at the Delhi School of Economics and was beginning to get interested in development economics. I read this book with great interest.

Those were the days of exciting work on rural economics. Ashok Rudra and Pranab Bardhan were collecting and analysing data. Amit Bhaduri, Amartya Sen, Joseph Stiglitz, David Newbury and other leading economists were active participants in this research agenda, combining new data with cutting-edge theory to understand the economics of tenancy contracts, rural credit, and agrarian change. There is little surprise that Bliss and Stern’s Palanpur became a celebrated book.

The history of this research turned out to be rather different from what anybody had planned. What was meant to be a one-time study, became a saga. Nick Stern returned to Palanpur several times, and the publication last year of How Lives Change: Palanpur, India, and Development Economics, by Himanshu, Peter Lanjouw and Nick Stern, has given us a rare panel view of a small economy. The first study of Palanpur was actually done in 1957-58 by the Agricultural Economics Research Center of Delhi University, and recorded in a paper by Nasim Ansari. Going by this, what we have now is a rich record, spread over several decades, of this village economy.

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This new book brought back the nostalgia for early development economics, and for the Delhi School of Economics, which stood out as a hub of intellectual activity, with open, critical discourse, that was rare outside of the US and Europe.

How Lives Change is a remarkable book which brings together two qualities seldom seen concurrently — empathy for the subject, in this case the inhabitants of Palanpur, usually found in anthropological writings, and the rigor of statistics and theory, associated with economics.

This new book provides a keen, bird’s eye view of research in rural India, with scholarship and a lightness of touch, rare in economics. Thus we learn about the befuddlement of villagers when Bliss and Stern first arrived in Palanpur in 1974. The question that the inhabitants asked repeatedly was “matlab kya hai?” It was the economist Clive Bell, with earlier field experience in Bihar, who advised Bliss and Stern: “You must convince them that you are mad but harmless.”

What makes this latest book especially valuable is the authors’ use of Palanpur as a testing ground for what has happened all over India, all the way to 2008, with some data even up to 2015. Much has been written about India’s growth trajectory, which picked up sharply after the 1980s. It turns out, this is well reflected in Palanpur. Between 1957 and now, the villagers of Palanpur became 2.4 times richer in terms of real per capita income. From 1957 to 1982 their incomes grew at 1.44 per cent per annum. After the mid 80s, growth picked up and over the next 25 years it grew at 2 per cent per annum.

Caste continues to have a hold but it is fortunately getting weaker, and further, there is mobility. The dominant caste, the Thakurs, have prospered between 1957 and now, but the Teli Muslims have done even better and now have the highest per capita income in Palanpur. The chief source of prosperity is mobility, being connected to the rest of India — both via migration and by the ability to commute.

The experience of Palanpur is used by the authors to offer useful tips to India — the importance of education, human capital and better vocational training, the need for even greater connectivity to towns and cities, since this is often the conduit to growth and prosperity; and finally, the authors draw attention to climate change. With the use of more sophisticated harvesting technology, there is a risk that the region in and around Palanpur will take to large-scale stubble burning, which is happening currently in Punjab and Haryana and casting a shroud over Delhi. India needs planning and public policy to avoid this looming crisis. Despite all this, the book ends on an optimistic note, celebrating India’s remarkable growth story.

To close on an end note, while India’s economy has changed, it is worth recording that villagers too have changed from those early years when Bliss and Stern did their data collecting. It is rumored that villagers in some parts of India have now seen so many researchers that when they see a new one with a questionnaire, they first ask if it is for a Master’s or a PhD thesis, and accordingly make the answers short or long.

The writer is C Marks Professor at Cornell University and former chief economist and senior vice president, World Bank