Title: The Future of Indian Economy: Past Reforms and Challenges Ahead.
Edited by: Yashwant Sinha, Vinay K. Srivastava
Price: Rs. 795
Former Finance Minister Yashwant Sinha & Vinay K. Srivastava, Dean and Associate Professor, Raffles University, Neemrana, have edited a book The Future of Indian Economy: Past Reforms and Challenges Ahead. The history of economic liberalization is documented comprehensively in the brilliant book. The book revisits pre and post-liberalization period. Leading economists and politicians like C. Rangarajan, Sanjaya Baru, N. K. Singh, Yoginder K. Alagh, Yashwant Sinha, U. K. Sinha, Mani Shankar Aiyar have contributed their articles for the book.
Economists say that if India won its political independence in 1947, it won its economic independence in 1991. However, there is no consensus on economic reforms in the country. The party in power does something opposite to what they used to tell the people of the country when they were in the opposition. It applies to both BJP and Congress. The BJP espoused the cause of economic reforms when they were in power between 1998 and 2004 but opposed after they lost elections in 2004. The Congress, now in opposition, is criticizing the economic reforms promoted by Narendra Modi led government. The word “economic reforms” is still seen with some suspicious. BJP led National Democratic Alliance (NDA) lost 2004 elections and one of the major reason was their overemphasis on the metro cities and slogans like “shining India”. The pro-economic reforms constituency is still small but it is highly influential. It is gradually increasing and plays an important role in shaping the public opinion.
- Rangarajan in his article, Reforms in monetary and banking sectors: Early developments, correctly says,” Reforms were a response to the acute economic crisis that India faced in 1991.”
In his significant and important article, are economic reforms accepted in India? Yashwant Sinha writes economic power is inexorably shifting away from the Western Hemisphere. A new world order is struggling to be born. We are truly at the crossroads of history. He is critical of socialist era approach for neglecting rural areas and he has same complaint against liberalization era.
Twenty metric tonnes of confiscated gold worth $ 200 million was made available by the RBI to the State Bank of India for sale, with a repurchase option, to the Union Bank of Switzerland. Yashwant Sinha was then a finance minister in the Chandra Sekhar government. It was done to avoid default and ensure its external payment obligations were met. Sinha and Srivastava in their introduction write Chandra Sekhar was a pragmatic leader, and, today many experts are of the view that history has not judged him rightly. Despite leading a caretaker government, he had saved India from defaulting on payment of external debts by mortgaging gold reserves to raise funds.”
The economic liberalization began twenty-six years ago in 1991. The finance minister Dr Manmohan Singh’s 1992 budget effectively launched liberalization. N. K. Singh says,” The Dream Budget of 1997-98, presented by P. Chidambaram on 28 February 1997, ushered in some major tax reforms, including significantly lowering of the personal income tax rates to 10%, 20% and 30%, among others. The ‘peak rate’ of customs duty was also brought down significantly to 40% in 1997-98 and much lower in subsequent years.”
In his foreword, Deepak Nayyar warns,” Twenty-five years later, it is clear that all is not well with the economy as a whole. There are three persistent crises manifest in jobless growth, persisting poverty and rising inequality. These mounting crises, which have unfolded as a reality through the era of economic liberalization, could worsen in the future.” India’s growth rate has slowed down to 5.7% in quarter one of 2017-18 is a matter of concern. It proves that all is not well with the Indian economy despite tall claims.
U K Sinha in his article Twenty-five years of securities market reforms: issues and challenges give details of evolution of capital market. He writes,” Capital market activity expanded rapidly in the 1980s and the market capitalization of companies registered in the BSE rose from 5% of GDP in 1980 to 13% in 1990.”
The crisis also gives an opportunity. In 1990-91, India faced a serious economic crisis. India tried to respond it by opening the door of economy and it helped. Though, it also created many other issues. The divide between haves and have-nots is growing rapidly. It needs to be tackled. It is also a reason that often we hear “reforms with human face.”