In this definitive book on economic reforms in India since Independence, Bhagwati and Panagariya decisively demolish myths, which critics use as weapons to wound and maim the reforms.
Jagdish Bhagwati is University Professor of economics at Columbia University, a nominee for the Nobel Prize and a long time fellow at the Council on Foreign Relations in the US. He is the author of several books and has annexed many prizes and is rightly regarded as an intellectual pioneer of India’s reforms for which he has been honoured with the Padma Vibhushan.
Arvind Panagariya is also from Columbia University and quondam Chief Economist of the Asian Development. He has worked for the World Bank, IMF, WTO, and UNCTAD in various capacities. He has authored many books and was awarded the Padma Bhushan. The voices of both are heard with considerable respect the world over.
The book under review is a treatise on India’s economic reforms post-1947 reforms that have been plagued by a number of unfounded myths. The authors employ systematic data and rigorous analysis to nullify critics who attempt to denigrate the positive results of reforms. The panacea the duo offer is intensification of reforms that contribute to economic growth that is at once sustained and speedy. They argue that nothing save growth can generate adequate revenues for the provision of education and good health for the masses. They deal in detail with reforms which assist growth making it inclusive and lead to effective and efficient redistribution from the rich to the poor.
India’s Tryst with Destiny
Jagdish Bhagwati & Arvind Panagariya
Published by Collins Business
Pages 284; Price: Rs 599 |
The conjunction of the politics and the economics of poverty reduction envisaged in Jawaharlal Nehru’s memorable speech ‘Tryst with Destiny’ is very relevant and forms the opening theme of the book. It is a comprehensive analysis of several myths that have enveloped Nehru’s ideas and policies and an attempt to clear the debris of ex-cathedra critiques of India’s reforms and measures to broaden and deepen the reforms.
One of the myths which the authors demolish is that people believe that poverty, illiteracy and ill-health afflict India because its leadership ignored them in favour of growth ; that the economic reforms focusing on growth failed to help the poor, especially the socially disadvantaged; that any gains claimed in poverty alleviation derive from the use of progressively lower poverty lines; and that even if any gains have been achieved, reforms have done precious little to improve health outcomes.
The authors depict the historical evolution of Indian macro-economic policy framework ranging from Jawaharlal Nehru’s affection for socialistic ideas to the active implementation of nationalisation policies under Indira Gandhi regime to present post-liberalisation era to the future possibilities of enhancing the pace of economic progress with enhanced reform measures. They also delineate how these restrictive policies ended up in reduced growth rate to abysmal levels and increased the social inequality.
The book is in three Parts. Part 1 deals with countering the unascertained myths on the imbalance between growth and social justice. Five chapters deal with major domains of macro-socioeconomic aspects. A few of the myths are: (1) Planning pursued growth as an end in itself, ignoring poverty reduction (and other social objectives). (2) Reforms do not explain the faster growth in India since 1991. (3) Reforms have led to increased inequality. (4) Impact of reforms on Health and Education: The Kerala Model has yielded superior education and health outcomes. Despite high growth, Gujarat has performed poorly in health and education. (5) Reforms have led to increased suicides by Indian farmers The post-1991 reforms have resulted in a tsunami of corruption.
The authors have successfully tackled these myths with absolutely unchallengeable data and they prove that only growth can provide sufficient revenues for the provision of education and good health for the success.
Part 2 of this book deals with what the authors categorise as Track 1 Reforms, which will further help accelerate growth and make it more “inclusive’. Part 3 deals with Track 2 Reforms. The focus is on making redistribution programmes more effective as their scope widens. The authors believe that we should balance growth with social objectives Their optimism is objectively based on increasing positive public attitude, mass appeal against social ills and gradual diminishing of anti-reform political power centers and revival of economic fundamentals. This is compulsory reading for all planners, social scientists and students of economics and development.
P.P. RAMACHANDRAN
