Indian Political Economy in the 21st Century- Book Review

The book "Indian Political Economy in the 21st Century'- Facets and Challenges written by Dr G.R. Krishnamurthy (GR Krishna Cogineni) is predominantly an assemblage of the talks given by the professor over the years in national and international conferences. It traces the economic development in the country starting from the first five year plan made after independence (which focused on agriculture)  to the present economic scenario. The book has been divided into four parts :  Part I discusses the core sector challenges, Part II Economy and society in transition , Part III India's foreign trade and relations and part IV Professional and ethical management & Governance strategy. 

When I studied B.A. Economics for my graduation in the late seventies, our discussions centered around aspects such as Indian agriculture being "a gamble of the rains" and the problems of  fragmentation of agricultural land  resulting from division of land  among heirs on the death of a patriarch. Heavy dependence on the rain God has continued to be a problem in spite of  a few early dam projects like Bhakra  Nangal in the state of Punjab/ Himachal  Pradesh.  The  noted economist V.K.R.V. Rao had suggested the linking and channelizing of rivers in the country appropriately to avoid flooding in the eastern part  and making it available to the rain deficit states. His proposal was not immediately accepted by politicians who were concerned more about which state would get more from the project. Finally it had to be abandoned since the original cost estimates had gone up by many times as we dilly dallied on the decision making.

Dr Krishna gives us  a ring side view of the problems faced in the villages, particularly by  women who are the backbone of society. Women's economic empowerment through  micro finance is a positive development that has opened up  the possibilities of women's entrepreneurship and development. It not only provides her with access to incomes and assets but also decision making power at home and community activities. It was a model successfully adopted in Bangladesh by Prof  Muhammad Yunus, banker and social entrepreneur through his Grameen banks  that won him a Nobel Peace prize in 2006. I am sharing here a video of an address given by Prof Yunus at the Ashoka University at Sonipat Haryana, about the practical problems at the village level and how he went about solving them. It is very relevant to part I of our book under review. 

In India, the micro finance model is sought to be implemented with the help of Self Help Groups(SHGs) consisting of 15 to 20 poor rural women . The book discusses the extent of success of the schemes and the problems and criticisms that need to be addressed. Adequate support network is most essential  for its success. The dynamics of caste in the village has been explained  with a case study of an Andhra village panchayat .It  gives readers an authentic feel of the reality of life in the villages and the challenges involved. 

The economic liberalization and the socio- cultural transformation in India is another important subject that is discussed in the book. According to the author, after the launch of the economic liberalization program in 1991, India showed an impressive growth rate of 6 to 7% per annum for 25 years till 2016. For 45 years prior, it only had a growth rate of 3% per annum. The information technology boom contributed to 50% of GDP of the whole country. He says "The middle class and the rich are the largest beneficiaries of the fruits of economic growth". some of the impact of this development include increase in the registered motor vehicles from around 2 crores to 16 crores during the initial two decades of liberalization (1991-2011), India became a prominent player in the global IT scenario. Every third Indian began to be seen in someway as coming under the bracket "Middle class" kindling the interest of the world for India as a destination for foreign direct investment(FDI). 

Dr Krishna says that economic prosperity has brought with it some changes in social and cultural aspects in the country - with materialistic consumerism becoming  a way of life,  there is "no personal relationships and no family bonds and many Indians including teenagers, children, senior citizens began to feel loneliness and alienation in their lives"  leading to psychological frustration and psychiatric problems. The divorce and crime rate also rose. On the one side, there was economic upward  mobility while on the other, there has been an increase in unemployment due to our education system failing to produce people who are employable  as they lack the required skills. A sense of 'aimlessness' has gripped the youth.  In the author's words "India a land of Buddha, Ambedkar and Mahatma needs a different kind of social transformation than an American or European  model. Our economic growth has not resulted in a type of social transformation which is India soul centered". 

The book also discusses at length the challenges of  human resource development in Indian organizations underscoring the need for imparting better skills, competencies and attitudes with a  focus on improving the very 'quality of life' of human resources.  The managerial focus and strategies are discussed in the chapter titled " Productivity in Indian Public sector undertakings (PSUs). Human resources need to seen as "creators of development" rather than as one of its residuals and a deliberate process should be in place for their empowerment. Curriculum restructuring has been suggested as a must  for excellence in management education. Other economic subjects deliberated on, in the book include the trends in FDI investment in India and China, ASEAN and India and  the significance of the BRIC countries in the global economy.

The book  highlights the role and importance of small industries which are an important source of employment.  Dr Krishna notes that "Roughly 90 small scale units fall sick everyday in India". some of the solutions suggested to meet the challenges faced by small units are a comprehensive package for revival, withdrawal of all arbitrary recover proceedings, creation of a separate bank to cater to the working capital needs of SSIs (Small scale industries), exemption of taxes in rural and backward areas. Purchases on preferential basis, all Government requirements from SSIs, creation of separate marketing yards for selling the products of SSIs and small producers, Free legal aid to small entrepreneurs etc.   

In the last chapter, a third approach to development attributed to Ganhiji has been discussed as the need of the times. Gandhiji had advocated industrialization and adoption of technology "commensurate with the needs, ethos and tradition of the Indian population, economy and society, particularly the peasantry." The efficacy of  latest developments in the economic front brought in by the NDA 2.0 Government on its assumption of power in 2014, has not been analysed in detail in the book since it is only  after some time has lapsed that the real impact of a policy or action will be known and can be measured. The author has therefore discussed  it in the beginning of the book under " Prologue". 

The NDA 2.0 Government has   announced an ambitious goal of making India a $5 trillion economy.According to the author "PM Modi has taken some drastic but highly controversial measures like demonetization, introduction of GST etc. Though taken with  noble objectives, did these measures achieve the goals?" is a question that needs to be answered. He has cited some parameters to show a decline in many areas with a slide "in overall GDP growth from 8% a year ago to 5 % in 2019. Covid 19 has now added to our woes and things are bound to get more difficult in the near future before we are able to bounce back.

" Indian Political Economy in the 21st Century" is a very comprehensive book touching  upon various aspects that has  impacted the Indian economy over the years with some prescriptions on the way forward. At many points while reading the book I found myself thinking "If only I had such an exhaustive book thoroughly covering so many aspects, when we were  students!". I am sure that the libraries of management schools and colleges offering B.A./B.com. courses would find this book a valuable addition to their bookshelves. It is laced with case studies and plenty of statistics on the subjects discussed. If there is anything I would have liked more, it is an elaboration of the "Third path approach" of Gandhiji with  inputs from present day economists on how useful and feasible it would be for India to implement today and the extent of its acceptability given the present mood of the nation.

 Personally, I am inclined to agree with the author that a balanced approach is the need of the hour, particularly now that  we have seen how greed has done great harm to the economy of capitalist countries like USA. Many of our citizens in rural areas would not leave their homes to come to urban areas if they had good opportunities for a decent living in terms of economic and other facilities in their native place. To that extent the pressure on the resources in the towns and cities would have been less. In this context we would do well to keep in mind the dream of the  people's president APJ Abdul Kalam for  PURA ( Provision of Urban amenities in Rural areas) so that all Indians will enjoy a high quality of life. This would also be in line with the aspirations of more and more young Indians who are articulating a desire to be and have the best they can! 

NB: The highly informative and insightful book " Indian Political Economy in the 21st Century" can be bought through this link.

 https://www.amazon.in/Indian-Political-Economy-21st-Century/dp/B085FWKXRD