"The state has a role and
the market has a role"

The kings and queens of England look down from the walls of the 16th century Master's Lodge of Trinity College, Cambridge. In some ways the newest occupant of the Lodge may look slightly out of place in this milieu. But Professor Amartya Sen is keeping up the traditions of Trinity in no uncertain fashion. Three of the past five Masters of Trinity have won the Nobel Prize and Professor Sen is the 31st Nobel laureate of the university. Last week he met Paran Balakrishnan in the Master's Lodge. Excerpts:

Were you surprised to hear about the award?
Well, everyone has to be surprised by the award. I was panic-stricken to be called at 5 in the morning. One's first thought at that time of the morning is that something terrible has happened. I had gone for a memorial meeting in New York for the economist Mahbub-ul-Haq. I had flown in the night before and was terribly jetlagged. My first instinct was relief that nothing bad had happened.

Did you see the award coming?
Lots of people see it coming. In the US there are students who take bets on who will win it. It is true that for two years my picture was published as a plausible candidate. It is also true that among the student community I was prominently there in the betting stakes. But that doesn't mean anything because it is not the committee. If people speculate it doesn't follow that anything will happen. It was nice to be told that a great many economists thought it might happen. That, independent of the prize, is a nice thing. It is not demolished by not getting the prize. It still remains that these people thought it would be a plausible idea.

You've often regretted India's lapses in addressing education, health and land reforms. Would you suggest reforms to be put on hold to catch up with the lag?
The answer is that they should not be put on hold. Rather the process of economic reform and that of expanding social opportunities should be carried out simultaneously, with a lot more energy in the expansion of social opportunities than has been given to it in the past. But that is no argument for putting economic reform on hold.

Do you still support centralised planning of the economy?
I was never a supporter of centrally planned economies. I have always taken the view that the state has a role and the market has a role, that planning has a role and economic incentives have a role. I have also taken the view that democracy and human rights are not only extremely important on their own, they are also important as part of social change and economic development. I don't think my position about the role of the state and the market, of planning and incentives, has really changed over the years at all.

How do you view the working of the Marxist Government in West Bengal?
I can't really answer that question. I can't make an evaluative judgement without doing hard statistical work. The West Bengal Government has been very much more successful in some fields like land reforms than in others like stimulating modern industries in the urban centres. Also it has been more successful in local democracy and panchayats than it has been in having the pace of economic change quicken. We know that from general understanding.

Some people say that your early book, Collective Choice and Social Welfare, was your most important work. Do you agree?
As far as my writing in economic theory is concerned I would say it is probably the most ambitious. It certainly has had more impact than my other books in the field of economic theory.

Did you take a pay cut to come to Cambridge?
Yes, I took a 65 per cent cut to come here.

What do you intend to do with the prize money?
I don't really know. I will get some money of course though in my case half of it will go to the US Government. I still file my taxes in the US as well as the UK, since I am a resident in both places. Prize money is taxable in the US. Insofar as the prize gives some exposure to my ideas ... it would be good to see these issues receiving more attention.