India's tryst with Economics

The Age of Awakening is a colossal narrative of India's economic trajectory since Independence in 1947. Fraught with challenges at the time of inception, over the years, India has carved a unique niche for itself. Amit Kapoor and Chirag Yadav delve into this journey of the Indian economy – from its humble beginnings to its metamorphosis into a developing superpower. The Foreword by Dr Bibek Debroy, excerpted below, introduces India's unique challenges with a vision into the future. Excerpts:

I often ask people whether they have read a book by Alexander Campbell, The Heart of India. It was published abroad in 1958. They usually haven't because the book is 'banned' in India. The word 'ban' is often used loosely. This book has never been published or printed in India. The ban (Customs Notification No. 49, dated 11 March 1959) is on imports into the country. It is an extremely patronizing book, though that should hardly be a reason for a ban.

There is a section on a meeting with Vaidya Sharma of the Ministry of Planning: 'He (Vaidya Sharma) put away the housing-development papers and talked again about the Five Year Plan. "We have now entered the period of the second Plan. The first Plan built up our food resources; the second Plan will lay the foundations for rapid creation of heavy industry. Delhi, as the capital of India, will play a big part, and we are getting ready to shoulder the burden. We are going to build a big central stationery depot, with a special railway-siding of its own. There will be no fewer than 12 halls, each covering 2,000 square feet. They will be storage halls, and," said Sharma triumphantly, "we calculate that the depot will be capable of an annual turnover of 1,400 tonnes of official forms, forms required for carrying out the commitments of the second Five Year Plan!"

This quote is from 1958. Another from 1940, from a book published by Minoo Masani, called Our India, says: 'And so India presents a paradox[:] poverty in the land of plenty. It is a puzzle, but every puzzle has, as you know, a key or clue with which to solve it. And simple it really is, though all the statesmen and the politicians and the economists and the captains of industry and the other Wise Men of the East shake their heads woefully and argue interminably over each little twist and turn of the tangle and just get nowhere! ...How are we to make sure that the people who own big workshops do not use their key positions to send themselves higher up the mountain? The answer is quite simple. These big factories and plants should have no owners. Then who will run them? We shall, all of us, through our own Government... Is there any reason then why the supply of electricity and the manufacture of iron and steel and machines and chemicals should be left to a few businessmen and not be undertaken by the State?'

Economists and economic policies fashioned by statesmen and politicians, in consultation with economists, don't lead anywhere. They do lead somewhere, but not necessarily where one wanted to go. There is the famous conversation from Alice in Wonderland: Alice: 'Would you tell me, please, which way I ought to go from here?' The Cheshire Cat, 'That depends a good deal on where you want to get to.' Alice, 'I don't much care where.' The Cheshire Cat, 'Then it doesn't much matter which way you go.' Alice, '...So long as I get somewhere.' The Cheshire Cat, 'Oh, you're sure to do that, if only you walk long enough.'

In the Constitution, the word 'socialism' was deliberately kept out. B.R. Ambedkar, participating in the Constituent Assembly debates on 15 November 1948, opposed an amendment that sought to introduce the word 'socialist' in the Preamble. 'What should be the policy of the State, how the Society should be organized in its social and economic side are matters which must be decided by the people themselves according to [the] time and circumstances. It cannot be laid down in the Constitution itself, because that is destroying democracy altogether. If you state in the Constitution that the social organization of the State shall take a particular form, you are, in my judgment, taking away the liberty of the people to decide what should be the social organization in which they wish to live. It is perfectly possible today, for the majority people to hold that the socialist organization of society is better than the capitalist organization of society. But it would be perfectly possible for thinking people to devise some other form of social organization which might be better than the socialist organization of today or of tomorrow. I do not see therefore why the Constitution should tie down the people to live in a particular form and not leave it to the people themselves to decide it for themselves. This is one reason why the amendment should be opposed.'

The Constitution apart, at a certain point in time, there was a belief in socialism, not necessarily to be interpreted in the sense of centrally planned economies. After a visit to the former Soviet Union, a reporter from New York famously remarked, 'I have seen the future and it works.' Having witnessed the past trajectory of India's performance since 1947, most economists would now remark, 'We have seen the past and it did not work.' It did lead somewhere, but it certainly wasn't 'Citius, Altius, Fortius'. India was consistently outperformed by a succession of countries, with the costs of state intervention in the 1960s and 1970s no longer commensurate with the benefits. Those were lost development decades for India.

Amit Kapoor is an economist, but this book doesn't lead to nowhere. It captures the trajectory of the past, the promise of the present and, to a more limited extent, the promise of the future. The book isn't a typical economist's book, since it is also about the interplay between politics and economics. Not about what economists call political economy, but politics and economics. It is titled The Age of Awakening. This may be a neat turn of phrase. It may be an oblique reference to the famous shloka from the Katha Upanishad that Swami Vivekananda was fond of quoting. On the other hand, it may be a more direct reference to the 'Tryst with Destiny' speech, suggesting that it was India that slept while the rest of the world (such as East Asia) had awakened.

The book has four parts beginning around the time of India's independence. Part 1 focuses on the role of Jawaharlal Nehru in shaping the Indian economy. Part 2 covers Lal Bahadur Shastri and Indira Gandhi. Part 3 starts with Rajiv Gandhi and ends with the tumultuous political period of the late-1990s. Part 4 ventures into the new millennium and explores the role of Atal Bihari Vajpayee, Manmohan Singh and Narendra Modi in taking India's growth story forward. With such a terrain to cover, across more than seven decades, generalizations are inevitable. No reader will agree with every statement made. But every reader will agree that it is a very good read.

(Excerpted with permission from The Age of Awakening, written by Amit Kapoor with Chirag Yadav, published by Penguin under their imprint Penguin Random House)