India’s economic turnaround is now the staple of news, analysis, and buzzes in India and abroad, which is one of the reasons for this book to happen. It is a collection of 8 articles which have either appeared in academic and policy journals or in edited volumes. One of his major reasons of compiling a collection of writing is to reach a broader audience than somewhat the narrower audience at which many of the articles were being originally targeted. The two broad themes underlying the articles are: analysing India’s economic growth and its integration with world economy. The articles being both analytical and prescriptive gives fresh and unconventional answers to questions related to the turning point of India’s economy, its pattern of economic development, status of public institutions and its economic future.
The first section of this book includes 4 articles all relating to India’s growth; current and future growth. In the first half of this section we came across Arvind Subramanian quoting “dark age was not all dark”. This is because he believed that India’s response to the 1991 reforms owed a lot to the groundwork it laid in the 1980s and even earlier, when it acquired a skilled workforce and industrial experience, unharried by foreign competition. India’s growth in 1980s was driven by fiscal expansion and hence was termed unsustainable. Despite the rapid growth in income over last twenty-five years, it was seen that the share of GDP in manufacturing did not grow. What happened instead was that the decline of agriculture had been mirrored in a commensurate increase in the service sector. The other half of this section covered critical analysis of India’s key institutions-judiciary, bureaucracy and police which played an important role in allowing a market based economy to flourish. The irony is that on one hand these institutions played a key role in turning growth around 1980s but these institutions have themselves not demonstrably improved over time.
The second section of this book includes 4 articles all relating to India’s Globalisation; in goods, in ideas and capital flows. Trade in goods gave an insight of integrating through multilateralism or preferentialism. Through various analysis it was seen that it was the time for India to become a serious player in multilateral trading system. But there were two problems with using multilateral approach. Firstly, the prospects for current multilateral round for trade negotiations appeared uncertain. Secondly, the space of pure multilateral trade is fast shrinking. The next article in this section was on trade in ideas or intellectual property. It emphasized on the three areas where Indian negotiating position would probably be quite different than it was in Uruguay Round i.e. on copyrights and protection of software, on films and on pharmaceuticals. The final article analysed the trade in capital. This chapter outlined why exchange rates are important for development and makes the case for a more cautious attitude toward opening up to foreign inflows because the exchange rate consequence can at times be damaging for overall growth and exports. It might bid up the rupee and undermine the competitiveness of its exports.
This book, while introducing the reader to the economic transformation of India, also provides advices to the Indian policy-makers on policy options. It is well structured and is gives more clarity due to the presence of statistical data. But some of the articles have not retained much relevance beyond their own time. Even in their datedness, they have their own uses, serving as a useful history, shedding light on global trading context and the opportunities and constraints that India faced at a certain point in time. This book is an excellent read for policymakers and students who seek to understand India’s transformation more closely.