BOOK REVIEW

INDIA UNBOUND
FROM INDEPENDENCE TO THE GLOBAL INFORMATION AGE

SUBMITTED BY:AKARSHAN KAPOOR (F09002) SECTION-A

Its an intriguing itinerary that begins at the pre-independence era and,making its way through all the bumps and jerks,concludes at the advent of the IT revolution.Das is unarguably a consummate storyteller who has presented an exquisite melange of economic,social,cultural and political scrutiny of the last six decades of Indias independence. The book begins with a refreshingly novel comparison of India to the Asian tigers of the east.Das points out that we are mistaken in trying to paint stripes on India as it will never be a tiger.Its an elephant that has begun to lumber and move ahead.However,this elephant is also the embodiment of the wisdom and stability.

One of the greatest enigma in the countrys economic history is why we failed to create an industrial revolution and transform our society. Das gives things resons on this account : 1)Inward looking import substituting path. 2)Massive monopolistic and inefficient public sector. 3)overregulation of private sector. 4)Aversion to foreign capital and technology. 5)Inefficency of organised labor due to pampering by the govt. 6)Neglect of education.

The blame for this betrayal of Indias future has been put on its rulers,i.e.,the politicians incharge of the countrys administration and growth. Das aptly says that when individuals blunder, its unfortunate.But when rulers fail,its a national tragedy.Even more so when it results in neglect of human capabilities.Our biggest failure,according to Das,is our inability to eradicate poverty through provision of primary education and health care. Das also makes an interesting argument that the British Raj was the most important event in the making of the modern India.Whether its democracy,independent judiciary or the railways and canals,the British played the most important role in shaping the countenance of modern India.The Indian Railways,in particular,was the largest single injection of British capital into India.Yet,India alone among the great railway countries remained unindustrialized.The cause of this was thatthe railway companies at that time were controlled by the British and hence catered to only their petty needs.They were wasteful of their resources and inefficient in their operation.This explains why the railways did not engender an industrial revolution in India. In his tryst with Indias history,Das has made an excellent critique of Indias greatest political leaders like Pt. Jawaharlal Nehru and his daughter Mrs. Indira Gandhi.Nehru,as Das states,united the nation from the shambles of freedom,nurtured our democracy,promoted secularism and injected

the ideas of liberty and equality.But at the same time,he failed in his economic promises leaving behind a plethora of corrupt,domineering state and a highly inefficient public sector. Das emphatically blames Nehru for his aversion to private enterprise and businessmen.It was this aversion that led to the demise of numerous dreams of great entrepreneurs like Kasturbhai Lalbhai and G.D. Birla.But in the end,Nehru couldnt succeed in the task of ending poverty , ignorance and inequality of opportunity.To prove this point,Das provides the data that four out of ten Indians are illiterate,half are miserably poor etc. Mr Das also blames Nehru for chosing the flawed economic policy of a socialist state which eventually gave birth to the relentless corruption and inefficiency that haunts the growth of our country. However,Das thinks that capitalism can cure many of the ills that Nehrus socialism compounded. The cosy corruption of old Indian business habits cannot withstand competition, he suggests. Although the commercial bania caste was useful in kick-starting Indian capitalism, Mr Das points out that in a liberalised economy governed by rules rather than patronage, companies cannot afford to hire employees on the basis of caste. As for poverty, contemporary Indias worst blight, education will spread the benefits of economic growth to the masses.

The post-independence era till the liberalization of economy has been called as The Lost Generation by Mr. Das.Here he narrates a sorrowful tale about how our draconian controls on private enterprise and foreign participation strangled our industrial revolution at its birth and never let our economy take-off.At one juncture,he compares the speed and quality of service at a restaurant that he visited to the mistreatment he gets at a railway ticket counter or a nationalized bank to bring about the wonders that competition can do. However,this was never realised by our leaders who kept on implementing internal controls and international protectionism,before liberalization, that made India an underproductive and grossly inefficient economy, making too few goods of too low quality at too high a price. An unusual hero in this era of political blunders was Indias second prime minister,Mr. Lal Bahadur Shastri.Shastri assumed the office at a time when the country was in doldrums.Its people were poor and hungry and Indias deficit due to high food imports was burgeoning.Shastri realised the graveness of the situation and it was through his vision and determination that India brought about the Green Revolution resulting in self-sufficiency in foodgrains. This leads Das to infer that it wasnt Nehrus death that ended an era but the Shastris untimely demise. The demise of Shastri led to a political confusion in the Congress party which eventually decided on Mrs. Gandhi as the third prime minister of India.With all her promises about eradicating poverty,she was as short-sighted as her father. As Das explains,she attempted to preserve the three myths of the ancient regime-the value of licensing,the importance of high taxes and our protectionism against foreign investment.She ignored the power of competition and growth.

In fact,Mrs. Gandhi went on to stricten the economic policy leading to the worsening of our woes. The License Raj,which required every industry to aquire a license for commencing operations,proved to be the biggest deterrent to industrial growth.Regulations made investment difficult and production beyond licensed quotas illegal. The resultant stagnation led to what we call the "Hindu rate of growth," averaging some 3.5% in the first three decades after independence, when countries in Southeast Asia were growing at 8% to 15%. The sector of the economy that grew most was neither the agricultural nor the industrial, but the bureaucratic; regulation became a more important economic activity than production. It is sadly impossible to quantify the economic losses inflicted on India over decades of entrepreneurs frittering away their energies in queuing for licenses rather than manufacturing products, paying bribes instead of hiring workers, wooing politicians instead of understanding consumers, "getting things done" through bureaucrats rather than doing things for themselves. Das also narrates an incident that reflects the narrow mindset of Mrs. Gandhi.He once got a chance to meet Mrs. Gandhi and express his views about the efficiency of the market economy.But his efforts are of no avail as she shrugs him away calling him another market-wallah. Even in this period of tribulation for Indian entrepreneurs,Das enlightens us with a few success stories of men who rose against all odds and achieved unprecedented profits in business. One such story is that of Aditya Birla, establishing a string of successful companies in Southeast Asia because the impediments placed in his way by his own government made it impossible for him to invest in India. Conversely, Das tells us of Dhirubhai Ambani, a schoolteacher's son and former shipping clerk, who worked the system skillfully enough to build a world-class petrochemical and rayon empire.

The account of pre-liberalization era ends with a reference to the man who had,in his own right,sow the seeds for change in the India telecom industry.This man was Sam Pitroda,the self-made telecom millionaire in America.He revolutionized the telecom industry by making it possible for rural access and the introduction of Public Call Offices. However,his movement had an abrupt and dismal end with the defeat of Rajiv Gandhi and his accusation of corruption by the following government.In spite of the support he got from the people,he had to move back to the States a broken man.But as Das points out,today all those in the business of telecom and IT owe a small debt to Sam for his revolutionary vision and painstaking efforts. The summer of June 1991 is referred to as The Golden Summer by Das to depict the significance of the liberalization.The credit of this step goes to the then prime minister of India,Mr. P.V. Narasimha Rao and his brave soldiers,viz. Mr. Manmohan Singh(Finance minister),Mr. P. Chidambaram(Commerce minister) and Mr. M.S.Ahluwalia(Commerce secretary). The liberalization wasnt a result of careful and long-term planning but an emergency measure.Indias Forex reserves were down to two weeks of imports. Part of the nations gold

reserves were flown to London to provide collateral for 2.2 billion dollar emergency loan from the IMF. All this led to drastic alterations in the economic and trade policy which was envisaged by Mr. Singh.He had realised that we could no longer keep our economy closed and reforms were the need of the hour. Manmohan Singh emphatically told Commerce Minister P. Chambaram and Commerce Secretary Montek Singh Ahluwalia to go for a complete rejig of the same. Manmohan Singh was pleased with the proposals which were approved by the prime minister sending clear signals that India was opening up and moving to a market-oriented economy. As a result of this liberalization,there has been a myriad changes such as : 1)Govt.s fiscal deficit has reduced. 2)Forex reserves have shot up. 3)Inflation has come down significantly. 4)Competition has increased the efficiency of firms and the quality of products.

But Das also reacts negatively to the following stagnation of reforms and their absence in education and health care.There has been a lack of enthusiasm towards continually improving society by the way of reforms.This has led to the current state of stagnation with no hope of any more reforms in the coming future. Das also reflects the prevalent insecurity among the ruling class regarding the issue if reforms.Reform agenda is constantly derailed by the vested interests of politicians and bureaucrats . Politicians lack the courage to privatize huge loss making public sector for losing the vote of organized labor and they are left in the corrupt hands of the babus. Das also makes a subtle comparison between the new business class(New Money) and the old business class(Old Money) . A new Indian economy based on "globally competitive companies in software, Internet, IT-enabled industries, generic pharmaceuticals, and entertainment" is, he says, supplanting the old family businesses that had made their peace with the license-quota system. Das sees the emergence of "a new social contract of post-reform India where talent, hard work and managerial skill have replaced inherited wealth."

He narrates the rags to riches story of Narayana Murthy, the C.E.O. of Infosys, India's most
successful software company and Subhash Chandra, the founder of a global Zee satellite television channel,who is often called ''the Murdoch of Asia.'' Here Das signals the departure of the industrial age and the advent of the information age which should work for Indias advantage given the sheer talent and quantity of software and IT professionals in the country.

Such optimism is not entirely misplaced. India's high-tech industry has been the most visible success of the reforms, generating fabulous wealth and great opportunities. What is less clear is the extent to which this wealth is trickling down to the 300 million Indians who still live in poverty and the 75 percent who live in the countryside, far away from the new economy. Das also breaks the popular myth about Modernism and its comparison with Westernism.he says that there nothing wrong in being modern if it leads to self-sufficiency and happiness.Das criticizes swadeshi as being narrow-minded and suffering from inferiority complex.He says that such people forget that Palapuri Jains have captured half the world market share of uncut diamonds, Aditya Birla Group is the world's largest producer of rayon, Steel Giant Laxmi Mittal is richer than the Queen of England, Taj and Oberoi have created world class hotel chains, India's software companies have the best software engineers in the world and Indian entrepreneurs in Silicon Valley are at the heart of Internet revolution. Finally,Das forecasts that unlike the West,India will never lose its hold with religion and spirituality as it embarks on its journey to modernization.This is because of the powerful hold of religion in the country which makes us different from our Western counterparts.The challenge will be to keep religion a private matter.
Mr Das has a staunch faith that knowledge revolution accompanied by education will restore greatness and prosperity to India. He also mentions the urgent needs of reforms in agriculture, which continues to provide occupation to two-thirds of Indias people. It is with this conviction and optimism about the future that Mr. Das concludes the book.