Achi news desk-
AS INDIA GOES to the polls, Narendra Modi, the prime minister, can boast that the world’s biggest election is being held in its fastest growing major economy. India’s GDP, at $3.5trn, is now the fifth largest in the world—more than Britain, its former colonial ruler. The government is investing heavily in roads, rail, ports, energy and digital infrastructure. Many international companies, pursuing a “China plus one” strategy to diversify their supply chains, are eyeing India as the nameless “one”. This economic momentum will surely help Mr. Modi win a third term. By the time he finishes it in another five years or so, that is India GDP It could reach $6trn, according to some independent forecasts, making it the third largest economy in the world.
But India is prone to premature victory. He has enjoyed moments of such optimism in the past and squandered them. Its economic record, like many of its roads, is marked by potholes. Its people remain woefully underemployed. Although its population has recently overtaken China, its workforce is only 76% its size. (The percentage of women participating in the workforce is about the same as in Saudi Arabia.) Investment by private companies is still a smaller proportion of GDP than it was before the global financial crisis in 2008. When Mr Modi took office, India’s per capita income was only one fifth of China’s (at market exchange rates). It remains the same fraction today. These six books help trace India’s circuitous economic journey and assess Mr Modi’s mixed economic record.
Breaking the Mold: Reimagining India’s Economic Future. By Raghuram Rajan and Rohit Lamba. Penguin Business; 336 pages; $49.99
Before Mr Modi took office, India was an unhappy member of the “vulnerable five” group of emerging markets. His escape from this club owes much to Raghuram Rajan, who led the country’s central bank between 2013 and 2016. In this book he and Mr Lamba of Pennsylvania State University express impatience with warring narratives of “unmitigated optimism ” and pessimism about the Indian economy. They make the provocative argument that India should not aim to be a manufacturing powerhouse like China (and “fake China” as they say), because India is inherently different and because the world has changed. India’s land is harder to dispossess and its labor harder to exploit. Technological advances have also made services easier to export and manufacturing a smaller source of jobs. Their book is sprinkled with portraits of the kinds of industries they believe can thrive in India, including chip design, distance education – and some well-packaged ones. idli batter Both authors deplore India’s turn towards a teetering majoritarianism, which they argue will ultimately stifle its creativity and thus its economic prospects. Nevertheless this is a work of palliative optimism.
New India: Reclaiming the Lost Glory. By Arvind Panagariya. Oxford University Press; 288 pages
This book is a useful foil for “Breaking the Mould”. Arvind Panagariya took a leave of absence from Columbia University to serve as head of a government think tank set up by Mr Modi to replace the old Planning Commission. The author is unsparing in his praise for the prime minister and unsparing in his disdain for the Congress-led government that he swept aside. Mr Panagariya also has faith in the potential of labour-intensive manufacturing to create the jobs India so desperately needs. He argues that the country must, in a phrase borrowed from Mao’s China, walk on two legs – manufacturing and services. To do so, it should simplify its labor laws, keep the rupee competitive and rationalize tariffs at 7% or more. The book adds a “variety” of other reforms (including raising the inflation target, auctioning off unused government land and removing price floors for crops) that would keep Mr Modi busy no matter how long will he remain in office.
The Lost Decade 2008-18: How India’s Growth Story Devolved into Storyless Growth. By Puja Mehra. Ebury Press; 360 pages; $21
Mr Rajan and Mr Panagariya feature in this well-told account of India’s economic policy-making between 2008 and 2018. Ms Mehra, a financial journalist, describes the corruption and misjudgments of the previous government and the disappointments of a term Mr. Modi’s first. The prime minister was acutely alert to political threats but complacent about more immediate economic dangers. His government, for example, was slow to pile on the money India’s public sector banks needed after Mr Rajan and others exposed the true scale of their bad loans to India’s corporate titans. One civil servant recounts long and tedious meetings where Mr Modi monitored his piecemeal welfare plans, even as deeper reforms waned. “The only thing to do was to polish all the nuts and cana.”
The Billionaire Raj: A Journey Through India’s New Golden Age. By James Crabtree. Oneworld Publications; 416 pages; $7.97
For a closer look at those corporate titans, turn to “Billionaire Raj” by James Crabtree, formerly of the group. Financial Times. The prologue describes the mysterious late-night crash of an Aston Martin car, which is registered to a subsidiary of Reliance, a conglomerate owned by Mukesh Ambani, India’s richest man. Rumors swirl about who was behind the wheel, even after an employee turned himself in. The police tell Mr Crabtree that the car has been impounded for testing. But he finds it has been left on the curb outside the police station, hidden under a plastic sheet. It was still there months later. Mr Crabtree goes on to lift the lid on the successes, follies and influence of India’s other “Bollygarchs”. They include Vijay Mallya, the former owner of Kingfisher beer and airlines. Once known as the King of Good Times, he moved to Britain from where he faces extradition for financial crimes. Mr Crabtree meets him in bustling London, where the reprimanded hedonist is only “moderately late” for the interview. Only once does the author’s journalistic instincts fail him. He receives an invitation to Gautam Adani’s son’s wedding. The controversial billionaire is known for his closeness to Mr Modi and his equally close identification with staggering debt levels. Perhaps the bash warranted its own chapter in this book. But Mr Crabtree, not used to wedding invitations from strangers, refuses to attend.
Unequal: Why India Lags Behind Its Neighbours. By Swati Narayan. Context; 370 pages; $35.99
Far from the existence of the Bollygarchs or the Delhi ministries, Swati Narayan’s book draws a picture of her sociological fieldwork in the villages of southern India and the borders with Bangladesh and Nepal. She tackles the “South Asian enigma”: why some of India’s poorer neighbors (and some of its southern states) have outperformed India’s heartland on so many social indicators, including health, education, nutrition and sanitation. Women in Bangladesh have a longer life expectancy than in India, and fewer of them will be underweight for their age. Her argument is illustrated with a grab bag of compelling statistics and portraits: from disused clinics in Bihar, birth centers in Nepal, and well-appointed childcare centers in the southern state of Kerala. In a village on the Bangladeshi border, farmers laugh at their Indian neighbors who still defecate in the fields. She details the brutal divisions of caste, class, religion and gender that still oppress so many people in India and undermine the common purpose needed for social progress.
How British Rule Changed India’s Economy: The Paradox of the Raj. By Tirthankar Roy. Springer International; 159 pages; $69.99
Many commentators describe the British Empire as a relentless machine for draining India’s wealth. But that might be giving him too much credit. The Raj was surprisingly small, temporary and often ineffective. It was overly dependent on land for its revenue, which rarely exceeded 7% of it GDP, highlights Tirthankar Roy of the London School of Economics. He spent more on infrastructure and less on luxuries than the Mughal empire that preceded him. But he neglected health care and education. India’s GDP the person hardly grew from 1914 to 1947. Mr. Roy reveals the great disparity within India which is hidden by that damning average. Britain’s “merchant empire”, committed to globalisation, was good for coastal trade, but left the countryside poor and stagnant. Unfortunately, for the rural masses, moving from rural areas to the city was never easy. Indeed, some of the social barriers to mobility that Mr Roy lists in this book about India’s economic past are still evident in books about its future.
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