India’s Long Road: The search for prosperity
Author: Vijay Joshi
Publisher: Penguin/Allen Lane
Pages: 421; Price: Rs 699
Bimal Jalan, former Governor of the Reserve Bank of India, where the author of this book was engaged, once upon a time, as special advisor to the Governor, bestows lavish praise on the book by calling it truly extraordinary . And having gone thru the book very carefully, I couldn’t agree with more. Jalan’s compliment to the author is more than deserving.
Vijay Kelkar another well known bureaucrat and Chairman of the thirteenth Finance commission about the book in laudatory tone. According to him, the author has effortlessly and lucidly suggested the deep determinants for India for achieving high quality growth. Economists seldom agree on measures to be taken for rapid all round growth. Here, three practicing economists seem to me to agree on what needs to be done for and by India.
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Vijay Joshi, the author, is emeritus Fellow of Merton College, Oxford. He has, from time to time, held various official and business positions including , as stated earlier, Special Advisor to the Governor RBI, Officer on Special Duty, Ministry of Finance, GOI and several international organizations including the World Bank. But his primary occupation is teaching and research at the University of Oxford in fields of macroeconomics, international economics and development economics.
India has been the subject of many extravagant predictions and hopes. Joshi, the author of this book, argues that the foundations of rapid, durable and inclusive economic growth in India are distinctly shaky. He lays out a penetrating analysis of the country’s faltering performance and suggests the course it should follow to achieve widely shared prosperity.
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Joshi argues that for India to realize its huge potential, the relation between the State, the market and the private sector need to be comprehensively realigned. Deeper liberalization is very necessary but far from sufficient. The State needs to perform much more effectively the many tasks that belong squarely in its domain. His radical reform model includes a fiscally affordable scheme to provide a regular ‘basic income’ for all citizens that would speedily abolish extreme poverty. After a brief discussion of India’s position in the world, and its relations with various countries and the bewildering social contrasts,
Joshi says that India has many accomplishments to its credit not with complete success, but success all the same. His best judgment is that
India’s goal should be to achieve seven to eight per cent growth for the next three decades which alone would enable it to get over the extreme poverty. He has also tried to define what he means by prosperity, a relative term, and many others may have different ideas or opinions. The reforms initiated in 1990s have run out of steam and, in any case, they were partial and incomplete.
The book argues that India will be hard put to achieve high quality and enduring per capita 8 per cent growth for the next 3 or 4 decades in case “business as usual” approach is followed. Radical reforms alone on the lines adumbrated in this book by Joshi can, however, put fire in the belly of the economy. Joshi, at the same time, highlights that superfast growth phases are typically quite short.
India’s performance so far has been quite creditable but not exceptional. At the same time, he points out that Indian State does not deliver in the areas that fall squarely in its province, such as, administering law and order, macroeconomic stability, delivering speedy justice, making sure that public services are provided and creating an effective and adequate safety net for poor people.
Land acquisition and illogical port to sick industrial units are two of the many problems in the India’s policy framework. Fearful of competition from abroad, the India has remained a highly closed economy till the late eighties. Competence of the State has declined in relation to the increased demands of public demands for education, health and public goods.
The most interesting suggestion made by Joshi is to provide ‘Basic Income’ to everyone together with elimination of all subsidies. India has some 370 million poor people and all of them can be taken care of in respect of their dignity. This seems to be a worthwhile idea. Joshi has done his calculations and homework and placed the document for public debate. Hopefully, the political leadership will take note of this and wake up to their responsibility. The journey would be long one and hard. This is a vibrant book and I hope the vibrations will reach the proper quarters sooner than later.
