Atanu Dey On India's Development

Books about the Current State of the Indian Economy

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Click on image above for more on the book at Amazon.

In a comment to a blog post, “Stupidity at the Core of Human Misery,” Eric asked about books that explore the current state of the Indian economy. Here’s what I feel about the popular literature on India’s economy.

Loknath kindly mentioned a few popular books on the Indian economy by various authors (here, and here.) Khushwant Singh is a journalist and authored several fiction and non-fiction books on India. He is a popular writer much celebrated by some but I unfortunately find him shallow and hasty. I would not read him to get a reasoned perspective on important matters, least of all the state of the Indian economy. Politics perhaps but certainly not economics.

Ed Luce’s “In Spite of the Gods” was the usual claptrap about India at the verge of becoming an economic heavy weight — in spite of the Gods!

The title of Luce’s book immediately appeals to the prejudice that somehow Hindus (the majority of Indians are Hindus, although it may not appear so) with their mindless worshipping of millions of idols are somehow congenitally incapable of economic prosperity, and implies that that incapacity has something to do with the fact that they worship idols.

That quote is from a January 2007 post (wow, it’s been four years!). Here’s how I feel about books of that genre:

I am wildly conjecturing here, of course, but perhaps Luce has read and believed too many media reports. Take, for instance, this bit from the review: “Its excellent engineering schools turn out a million graduates each year, 10 times the number for the United States and Europe combined, yet 35 percent of the country remains illiterate.”

Excellent engineering schools, did you say? And the definition of “excellence” is? Does it mean that only about a quarter of the graduates are employable? If that is what it means, then I can decode what the reviewer means when he writes: “Despite its robust democracy and honest elections, India faces the future saddled with one of the most corrupt government bureaucracies on earth.” I understand. What “robust democracy” means is “a circus where a large number of ill-informed people vote based on which party is able to most convincingly promise them goodies based on caste and religious lines.”

“Honest elections” means . . . Don’t know but I guess it has something to do with the fact that the elected have a much higher percentage of criminals (murderers, rapists, scam artists, blackmailers) among them than the general population.

I have to admit that I take a dim view of any author who regurgitates mindless economic half-truths. I pass it off as mere ignorance. But when someone talks of the “alarming rise of Hindu nationalism,” I am not as charitable. I think it is naked bigotry and prejudice against Hindus. According to them, Hindus are supposed to be passive residents of a land and should not become uppity and talk about national pride or pride in their culture or ethos. Everyone has a claim–a first claim even–to resources but Hindus should take a back seat.

Moving on, Gurcharan Das’s “India Unbound” is a very popular book. The reason is understandable. The Indian urban educated chattering classes definitely see the squalid condition around and wonder when it is all going to change. The fantasy is that any day now India will become an economic superpower, an IT superpower or some undefined thing. Books like IU show how India has made some progress economically after stagnating for decades (if not centuries) and then push the fantasy that India will arrive any day now. Required reading for all who are burdened with a vague sense of inferiority and want something to cling to.

Nandan Nilekani’s “Imagining India” is a worthy addition to the class of books that are written by the extremely successful in the business world (such as Mr Das above), and which deal with the Indian economy. Being successful people, they have to be cautious and politically correct. These authors therefore generally avoid the uncomfortable matter of why is India poor.

Political correctness is a barrier to writing a book about why India is poor. India’s poverty is an unavoidable consequence of the economic policies that Indian governments have imposed on the country. Economic policies are made by governments. Governments are controlled by people. Most of the people who have controlled India at the central level come from one particular family. Jawaharlal Nehru, Indira Gandhi, Rajiv, Antonia Maino aka “Sonia Gandhi”, and Raul Vinci aka “Rahul Gandhi” in the pipeline. If you ever inquire honestly into why India is poor, you will have to conclude that that family has been as good for India as a metastasized brain tumor is to a body. If you conclude that, you are ill-advised to write a book saying so. And if you do write one, you are unlikely to be published. And if you are published, you are unlikely to be read. So there.

I am not a voracious reader and therefore I may be totally mistaken about this. But from what I can tell, there are book about India and how it has liberalized and become unbound. There are books which deal with what great things are in store for India. There are books what things have to be imagined and implemented for India to rise. But these books appear to never address the question “Why is India poor” and list the reasons for its persistent and deep poverty.

To my (perhaps simple) mind, it appears to be impossible to fix a problem unless one fully understands the cause(s). What we definitely need is a book that treats that question for most of the book, and if it does that part competently, the answer to what should be done would be too obvious to be stated.

I recall reading that someone said somewhere (how’s that for specificity) that for an economy to prosper all it had to do was take any Indian economic policy and invert it. India is a case study in how to impoverish an economy. Take the inverse of its policies and you have a winning formula.

Loknath mentions Ram Guha. A very able writer on cricket who has written voluminously on Indian history, I am told. I don’t know anything about cricket, and I definitely don’t take kindly to Marxist interpretations of Indian history. Does he know anything about the Indian economy? I suppose as much as a dentist knows about rocketry and space travel.

Which brings me to APJ “Dr” Kalam. He used to head the Defense Research department before becoming the president of India. His record as an administrator is patchy. He is a technology cheerleader. A genial grandfatherly man, I suspect he knows about as much about economics as I do about parasitology, which I take to mean how to sit in a parachute. His books should be required reading for high-school students but anyone above the age of 20 reading them seriously should be sent back to high-school.

VS Naipaul is an absolutely keen observer of India. I have read some bits of his non-fiction and I have promised myself that I will read his books on India soon. I would read him for understanding the sociological background of India but naturally not for an economic perspective.

Amartya Sen? A brilliant mind but I am allergic to socialism and leftist rhetoric. I respect him for his academic work but don’t care for his politics. I would not read him. But I would highly recommend his colleague, Prof Pranab Bardhan. His recent book, “Awakening Giants” is a must read. (Click on the image at the start of the post to go to Amazon.)

Loknath mention Arvind Panagariya. I agree that Panagariya is worth reading. Another respected academic who writes in the popular press is Kaushik Basu. Put him on your must read list for understanding India.

Anyway, this is getting to be a rather long reply to Eric’s rather straightforward question “what books you would recommend to someone trying to learn about the current state of the Indian economy and the extent to which growth has (or hasn’t) been spread across the classes.”

I think if you are living in India, you don’t need books to know the current state. You can read the news papers about once a month and keep your eyes open, and you will know exactly what the state is. To understand why it is in the state it is, think about the mass illiteracy, about limitless democracy, mass poverty, and India’s colonial past.

One last point before I end this. Eric mentions “the extent to which growth has (or hasn’t) been spread across the classes.” Bill Easterly recently posted a video of a talk of his in which he says that rapid growth — and more generally development — happens in an uneven way. As one person put it, inclusive and uneven are not antonyms. You can have uneven growth which is inclusive. I recommend his post (with the embedded video), “Development is uneven, get over it.”

Finally, thanks to Loknath for his recommendations on books to read on the matter. I hope my comments on some of them are not interpreted to be disrespectful of his opinion.

  • Shrawan Vikram

    You mention ‘To understand why it is in the state it is, think about the mass illiteracy, about limitless democracy, mass poverty, and India’s colonial past.” Yes, the reason is not only the colonial past but also the understanding levels and corruption levels of the governing personnel and their advisors including economic advisors. Just to take one example, export of food items or items used in production of food otems is the main reason for runaway food inflation in this country. This simple fact is being ignored. An honest and governing body in India will promulgate law for at least 20 years ban on exports of food items or of items used in production of food items.
    To understand and also for rapid removal of poverty , the seminal book ” 5 Years Guarantee : How to make India Richer ” (ISBN 978 81 7049 384 6 ) is with fresh approach in developmental economics and public policy. Simple ideas do great jobs nost of the times when nothing seems to be working.