The balance of payments crisis in 1991 pushed the Indian economy to near bankruptcy. In return for the IMF bail out, gold was transferred to London as collateral. The rupee was devalued and economic reforms were thrust upon the country. Degeneration to its nadir was the catalyst called for to unshackle the badly bruised national economy.
The LPG phenomenon [Liberalisation/Privatisation/Globalisation] was quickly set in motion. The fruits of economic reforms were reached and realised, when the highest ever GDP growth rate of 9% was reached in 2007. The LPG process still continues, which has been well accepted by people of all political hues; but unfortunately, the speed is often held hostage by the coalition dharma [read, drama] in the Indian politics.
Economic policy in the era closely following political Independence was the archetype of Fabian socialism —the school of thought fondly embraced by the national leaders in the governance of the country at that time. Their primary concern was to invest in heavy industries such as power, iron, steel, machinery, and chemicals.
The founding fathers were, however, convinced that a country could not develop its commercial and industrial acumen without acquiring parallel scientific and technological capabilities. Hence, the establishment of public universities and national research laboratories was undertaken on a war footing.
Now, it is a little more than 60 years of Independence when perhaps the country, being at a crossroads, needs to look back and examine what has been done, and what still remains to be done. It is in this context that the book under review comes into its own.
Evaluation of an economic development process is usually done only at the policy level. But, if one wants to make an exact and effective assessment, it is perhaps necessary to examine the translation of those policies into meaningful plans and programmes at the sectoral level; and also, it is essential to overview subsequent delivery and implementation.
According to the author, this book “is a call to draw attention to this often underemphasised, but extremely important component of the economic transformation process.” Further, economic growth is not a matter of choice; it is the sine qua non for the survival of a society. The author says that economic reforms constitute two distinct stages: the first stage is the enunciation of policy, and a strategy for implementing it. The second stage is the actual implementation and the delivery of results. Economic growth and employment opportunities are two sides of the same coin; one does not exist without the other. However, to achieve economic growth, it is imperative that in the first place, avenues of employment are created in every pocket of the population; and thereafter, the growth process will follow ipso facto. In the Indian situation, the paradox was that the powers-that-be had put the cart before the horse. Perhaps, to put things in proper perspective, the book is more about design and delivery at the microeconomic level, and less about the evolution of and engagement with the policy at the macroeconomic level.
Part I of the book is an exposition of the economic reforms undertaken in post-Independent India, and their efficacy, or the lack of it. The net result is a grossly underperforming system, which needs to be upgraded into a better scheme of things that will communicate, demonstrate, and deliver benefits to the people. The second part advocates “an alternative growth path.” It spells out the need to develop appropriate market structures, evolve enabling actions geared towards creating employment opportunities, and reorient the education methodology to facilitate and incorporate requisite changes in the system.
Writing in a positive wavelength, the author says the book is not a “critique of reforms as an economic strategy…..(but) a selective look about its faulty planning, the pitfalls, lessons to be learnt, ways to correct them” and an overall focus on the future.
In the ultimate analysis, economic growth per se is of no consequence, unless it leads to a better quality of life. “Growth for the sake of growth is the ideology of the cancer cell.”(Edward Abbey) That there is no merit in the disclaimer made by the author that he is a “non-economist” writing on economics has been amply borne out by the contents of the book, which is a refreshing contribution to the current literature on the subject.
