India Unbound: A review

1991 was a watershed in the history of India. Like 1947 was the year of democratic India, 1991 was the year of economic India. There have been numerous books on the birth of a New India -a new nation that dared to dream.

India Unbound by Gurcharan Das is one such book. However, unlike the majority of books on economic reforms, it is not just an economic analysis. It is much more than that spanning over one and half century of economic development of India. The book is divided into three volumes explaining political economy of India till 1965, from 1965 to 1991 and after 1991 respectively. What sets this book apart is that it is not a scholarly piece, rather is narrated by the author in an informal fashion. By this, Das is able to craft a synergy that includes his personal observations, scholarly views and political discourse.

The book provides good insight into the lives of GD Birla, JRD Tata, Dhirubhai Ambani and Aditya Birla among others. It gives a good critique of Nehru's economic policy, though is somewhat harsh at times. Das believes that Nehru was a good visionary but a bad manager. He hardly had any patience to manage the country's affairs. Das also discusses the Mahalanobis plan at detail and alternatives to mixed economy vision available then. Lal Bahadur Shastri, who succeeded Nehru, was 'not only less ideological but also was more realist'. Das credits him for green revolution and also fot attempts made at delicensing economy.

Unfortunately Shastri administred for a mere 19 months and no more. What if he had lived on? The question is similar to this one: What if Sardar Patel had been the first prime minister? We never know. Neither does Das deal with these questions. He does credit Nehru for the democratic governance and stability that was brought to the country under his charisma; many had written it off as a country bound to disintegrate.

Then came Indira Gandhi who took a sharp socialist turn, sharper than her father had ever meant to take. The mismanagement of economy after that is history. The corporate tax was 97%. Add wealth tax to it and you get a tax rate of more than 100% on the private sector! Many private businessmen were forced to resort to smuggling and tax evasion. Das contends that since the great JRD Tata didn't indulge in the practice, he had to sell some of his property every year.

Here Das gives a good criticism of socialism. He states that:

• India didn't have the ability to run its PSUs on profit. There were always constraints in the form of rigid labour laws, low autonomy and high ministrerial interference, unprofessional management etc. In fact trade unions and political leaders made it sure that not profit but employment become the prime aim of PSUs. According to the Dodson formula, growth = savings / ICOR. The ICOR of PSUs was too low in India.
  
• For development, there has to be creation of wealth. For creation of wealth, we need competition. There can be no competition without involvement of private sector. Das has given instances of Nehru disapproving of competition as something evil. His daughter took an even more radical posture and nipped the private sector in the bud.

An observation of Gurcharan Das is worth mentioning here. He says that there is nothing bad in inequality if every party benefits from it. To illustrate, he cites the example of Prof. John Rawls, a professor of philosophy at Harvard during his student days. Rawls had played a game in a class. He stated that the rules of the game are:

• Hypothetically, the class room is an egalitarian society i.e. everyone is equal
• Every person should have maximum liberty compatible with liberty of others
• We would opt for equality in any situation unless the inequality benefited everyone including the worst off and everyone had the same opportunity to reach the top

Now, suppose all employees of a factory are paid equally. If the president is paid more so that he is motivated to work harder for more profits for the company so that I would get better bonuses, would I not agree to it? What lies in Das's argument is meritocracy which also features in the writings of scholars of functional school of sociology like Kingsley Davis. Though forceful, Das decides not to deal with the numerous criticisms to meritocracy.

The reforms of 1991 are dealt with in great detail. The major actors of the reforms:
PV Narasimha Rao
Manmohan Singh
A.N.Verma &
P.Chidambaram are dealt in good detail. Das also makes an empathetic monologue on the New India, its aspirations, its strengths and weaknesses. He narrates stories of people -small and big -he has met during researching the book.

The point where this book lags is value neutrailty. He has made it clear in the introduction that this is no scholarly work. Yet, while discussing historical and socio-economic facts, one needs to maintain a value neutrality. It is due to this reason that he becomes too critical of some facets at times. His understanding of bureaucracy, for example, is flawed. He has demonized the bureaucracy without knowing that bureaucracy is highly disciplined, yet is a reflection of policy makers' policies. Called the backbone of Indian democracy, the bureaucracy was very rigid before 1991. Yet, the way it faced the reforms of 1991 and showed flexibility in post-1991 period is commendable. Das misses out this point, even though he acknowledges that the real hero of reforms was not Rao or Manmohan Singh but the bureaucrat A.N.Verma. Nor does he understand that do whatever it may, the bureaucracy stays at the receiving end. Das doesn't make an effort to understand why bureaucrats are the way they are. The very definition of bureaucracy is characterized by impersonality and implmenting policy initiatives, not taking policy initiatives.

Overall, one must read this to get a feel of what the reforms really are beyond mobiles, small cars and SEZs.