There are other instances of a cavalier attitude when dealing with evidence. Consider the following statement made in the course of discussing misgivings that liberalization threatens a loss of national sovereignty: "It is worth examining how China has succeeded in achieving a high rate of growth and virtual abolition of poverty on the basis of billions of dollars worth of exports of a wide variety of goods." It definitely is worth examining why China's reforms have delivered export success and India's have not. That the document does not do. But it is also worth revealing that China's success in eradicating poverty predates its reform effort and recent evidence suggests that the loss of employment that has accompanied reform in China threatens a return to poverty among some sections of the population.
 
Incorrect, or even dishonest, assertions of this kind indicate that the intent of the document is not to prescribe the way ahead to the Prime Minister of a country sitting on a consensus over reform with little knowledge of what to do with that consensus. Rather it is to pack a set of slogans into a pamphlet, which the authors presume would be credible because of their own stature. Unfortunately, the validity of that belief would not be judged by the market that the authors hold so dear, since the document is available free of cost to those eager to read it.
 
Even if there is some substance to the EAC's belief in its own credibility, some far-reaching recommendations in the report are bound to test it severely. For example, the document recommends that the procurement policy should be drastically revised and replaced with a support price policy that limits government purchases to that required to prevent a sharp fall in prices. As a corollary it suggests that the role of the FCI should be reduced to maintaining a minimum targeted buffer stock of say 10 million tones and the PDS should be supplied with grain obtained on the basis of tendering by private traders. There is an obvious short-term problem with such a policy recommendation. Since the government is currently burdened with stocks close to 40 million tones, reducing stocks to the 10 million level would require offloading huge volumes of the stock in the open market, which would result in a collapse in prices. But the EAC could argue that this process could be spread out over time, and that the 10 million tones target should be seen as a medium term one. Even if that be so, the problem of price stability would remain. It hardly bears stating that the monsoon-dependent supply of foodgrains fluctuates much more than demand. So if the intention at all times is to maintain a buffer stock of 10 million tines, in years of good harvest open market prices would tend to fall sharply, and in years of bad harvest they would tend to rise. A support price policy of the kind being advocated can hardly ensure stability in food prices.
 
Another area in which the EAC has been rather bold in its recommendations is the labour market. Interestingly, while the report refers rather approvingly to the controversial and non-comparable NSS 50^th Round consumption expenditures for 1999-2000, it does not mention the more acceptable employment estimates that emerge from that round. They point to a very significant deceleration in employment growth in both rural and urban areas, with the annual rate of growth of rural employment falling to as low as 0.67 per cent over the period 1993-94 to 1999-2000. This is less than one-third the rate recorded during the period 1987-88 to 1993-94. In fact, it turns out that this is the lowest rate of growth of rural employment in post-Independence history. What is more, the employment elasticity of rural output growth or the responsiveness of employment growth to output growth during 1993-94 to 1999-00 was also a third of that during 1987-88 to 1993-94. Clearly, the period of liberalization has been characterized by a setback on the employment front.
 
This however does not feature as an issue in the EAC report. It is more concerned with increasing the flexibility of labour markets confronting the organized sector. In its view, the requirement that government permission should be obtained for closure of units should be abolished or at the most restricted only to units employing 1000 workers or more, as opposed to its applicability to units employing 100 or more workers currently. This would supposedly provide "employers with sufficient flexibility to reduce the volume of employment or restructure producing units (or in extreme situations even close them down) when changes in market conditions and technology make it unavoidable." Given the trends in employment reported above, none can take seriously the EAC's view that such flexibility would generate new employment opportunities in the organized sector to an extent required to balance for the obvious deterioration in employment trends. The EAC is not just blinkered in its vision, it is clearly partisan.
 
What is of interest are the motives driving the EAC's decision to issue a document of this kind at the present moment. The intention could not have been a sudden desire to collate all reformist policy propositions in one document to provide the Prime minister with a reference book that aids quick recall. In any case, if it was, an index at the back would have been of much help, as the quick-reference manuals, produced for profit and sold to facilitate easy use of mass-market, packaged software has taught all of us well. One possibility is that, despite assertions to the contrary, it is the disturbing lack of consensus about reform that seems to have driven the EAC to produce this report and discuss, however inadequately, at least some of the misgivings about reform. With the tenth anniversary of the reform in sight, discussion about the gains from reform is bound to revive. That discussion can prove embarrassing for a coalition whose political backing is to be tested in the assembly elections that are imminent. The EAC report is possibly an early salvo aimed at muting the damage that such a discussion can have. Which is why it is surprising that some sensible people like Dr. Bimal Jalan, whose organization is more circumspect in its analysis of economic trends and cautious in advocating policies has signed this report. At least he should have realized that a good start to the task of downsizing government, which he advocates, would be a ban on the production of such poorly reasoned and totally futile pamphlets with funds drawn from an increasingly cash-starved exchequer.