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INDIA’S TRYST WITH DESTINY - DEBUNKING MYTHS THAT UNDERMINE PROGRESS AND ADDRESSING NEW CHALLENGES
In its history since Independence, India has seen widely different economic experiments: from Jawharlal Nehru’s pragmatism to the rigid state socialism of Indira Gandhi to the brisk liberalization of the 1990s. So which strategy best addresses India’s, and by extension the world’s, greatest moral challenge: lifting a great number of extremely poor people out of poverty?
Bhagwati and Panagariya argue forcefully that only one strategy will help the poor to any significant effect: economic growth, led by markets overseen and encouraged by liberal state policies. Their radical message has huge consequences for economists, development NGOs and anti-poverty campaigners worldwide. There are vital lessons here not only for Southeast Asia, but for Africa, Eastern Europe, and anyone who cares that the effort to eradicate poverty is more than just good intentions. If you want it to work, you need growth. With all that implies.
Bhagwati and Panagariya argue forcefully that only one strategy will help the poor to any significant effect: economic growth, led by markets overseen and encouraged by liberal state policies. Their radical message has huge consequences for economists, development NGOs and anti-poverty campaigners worldwide. There are vital lessons here not only for Southeast Asia, but for Africa, Eastern Europe, and anyone who cares that the effort to eradicate poverty is more than just good intentions. If you want it to work, you need growth. With all that implies.
304 pages, Hardcover
First published January 1, 2012
61 people are currently reading
1379 people want to read
About the author
Jagdish N. Bhagwati
76 books45 followersJagdish Natwarlal Bhagwati (born July 26, 1934) is an Indian American economist and professor of economics and law at Columbia University. He is well known for his research in international trade and for his advocacy of free trade.
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Displaying 1 - 30 of 36 reviews
September 6, 2013
It is a fascinating "doubles" match. This book is a "down the line" return to the one served by Amartya Sen and John Dreze. The winner is yet to emerge but the match is interesting for the audience/readers. "India's Tryst with Destiny" is a fitting response to "Uncertain Glory". However, what is fascinating is that both the "teams" want an "inclusive" growth but the prescriptions are different.
In the context of Rashtriya Swathya Bima Yojana also there is a difference of opinion. "Tryst" lauds RSBY and other health insurance schemes and terms them "on the right track". It has an extremely interesting comment to offer about the HLEG Report on health care: It "neither recognizes the problems, constraints and compulsions of the department of health at the national, state and district levels, nor offers any solution on how to deal with them".
In the context of Rashtriya Swathya Bima Yojana also there is a difference of opinion. "Tryst" lauds RSBY and other health insurance schemes and terms them "on the right track". It has an extremely interesting comment to offer about the HLEG Report on health care: It "neither recognizes the problems, constraints and compulsions of the department of health at the national, state and district levels, nor offers any solution on how to deal with them".
January 7, 2013
Policy discourse in India is always a slanging match between the pro and anti-globalization forces. The Left and the Liberals focus on the downside of India during the past twenty years of reforms which have moved India towards greater integration with the globalized world. They argue against the need for growth saying that it hasn't helped the poor and that poverty has not declined and that Indians are malnourished more than ever before. Even eminent Leftist economists like Joseph Stiglitz, Amartya Sen and Jean Dreze have been skeptical towards the need for growth to alleviate poverty, though they couch their arguments under 'growth not just for growth's sake'. For one who grew up in a lower middle-class milieu in India like me, this does not ring a bell. When I read such opinions, I get the impression that they do have a vested interest in saying so because socialism and the public sector have failed to reduce poverty significantly in India during the first 40 years after independence. If they accept now that neo-liberal policies have delivered growth and reduction in poverty, then it would be an admission of having been wrong. I suppose even Nobel laureates wouldn't do that.
Dr. Bhagwati and Dr.Panagariya belong to the opposite camp which believes strongly in globalization and growth as a means to alleviate poverty and promote inclusiveness. If this book has to be summed up in a few sentences, it would be as follows: "Growth is the single most important instrument of poverty reduction; and India needs to both accelerate growth and make it more inclusive through track-I reforms and make its redistribution programmes more effective through track-II reforms. Track-I reforms are about reforms in labor laws, acquisition of land for development projects, infrastructure development and higher education. Track-II reforms are about reforms in subsidies through direct cash transfers, nutrition, food security, health care and elementary education".
The book takes aim at the plethora of mostly negative myths that surround the reform efforts in India. In the authors' opinion, these myths and half-truths distort execution of economic policies and ironically, harm inclusiveness of economic growth. Most of the 'myths' are quite familiar to readers who have been interested in India's reform efforts and growth. Some of them have become so accepted as 'facts' that even eminent economists and civil society activists in India, such as Dr.Amartya Sen, critique economic policy in India with these 'facts' as a given. I was particularly interested in the way the authors have demolished a couple of them, which I also held to be facts rather than myths. They are:
1."The Kerala model has yielded superior education and health outcomes".
Contrary to the Left view that Kerala has advanced due to its traditionally socialist model, the authors show that two-thirds of primary and secondary education in Kerala is provided by private-aided schools, and almost half the people have shifted from government to private health service in view of the deteriorating performance of the former. Most of this has been made possible by the vast numbers of Keralites working in the Gulf and remitting money home. Also historically, Kerala's early integration with globalization through spice trade is a factor in giving Kerala a leg up when India became independent in 1947.
2. "India suffers from the worst malnutrition anywhere in the world, including the much poorer countries in sub-Saharan Africa".
The authors question the decline in calorie consumption as an indication of increased hunger and show through systematic data that, based on various health indicators, household expenditure data and other social indicators, this conclusion of 'malnutrition' is a myth.
3. "Reforms have led to increased inequality and ushered in the 'Gilded age' in India".
The authors, with the aid of data, show that this is not the case. Further, they also point out that income differences between the historically disadvantaged groups such as the Scheduled castes/Tribes and the others have NOT gone up during the years of rapid growth.
The authors provide sound reasons for medium and long-term optimism on India's prospects. One can argue that they are biased in this optimism. However, I agree with their poser, 'unless we expect that we can change the world, why turn to policy analysis at all?'. For people like me, who believe in the beneficial effects of globalization in poverty reduction, this book comes as a positive analysis based on statistical data and as an anti-dote to the prevailing negativity about India's present and future. Even people who are against India's reforms approach and neo-liberal economics, would find that they need to supply hard, data-based evidence in order to refute the arguments of Dr.Bhagwati and Dr.Panagariya.
This book would do a lot of good to the many middle-class English speaking Indians, who are not ideologically committed one way or another. It would help to dispel their current bout of negativity and pessimism, which are based on half-truths, partisan politics and often, lies.
November 10, 2013
Excellent book. Great understanding of indian economy. Must read for anyone even remotely interested in understanding the nation's economy and its various issues. The book presents pandit nehru in a surprisingly positive light. I confess that this has caused me how to re think my views about nehruvian economics. It has also revealed to me certain mistakes in the reasearch methodologies used by left wing economists.
November 29, 2020
Original review posted here https://www.reddit.com/r/IndiansRead/...
The Book is divided into 3 parts. The first part talks about the "myths" that were prevalent among certain economists and activists regarding India's growth policy post-1991 liberalization. The authors address concerns around the new policy not being inclusive, that it did not help get rid of poverty, that it increased income inequality and that it did not help in the betterment of health and education sector. The authors debunk these comprehensively using relevant data, and also describe the sorry state of Indian economy before 1991.
The second part deals with the "Track 1 reforms", which are reforms aimed directly at increasing economy growth rate. The authors talk in detail about land and labor laws, policies relating to education and infrastructure and suggest ways in which these can be improved.
The final part talks about "Track 2 reforms", which are reforms aimed at redistribution, and help the poorest sections of the society. As in the previous part, the authors here talk about ways to make effective policies for uplifting the underprivileged sections, they talk about employment, nutrition, healthcare and education areas where reforms are most important.
The authors call out the policymakers for absurd decisions, especially in the pre 1991 era. They put out comparison with similar Asian countries to show how India could have done better. They also highlight the fact that after liberalization, India still couldn't achieve what most east Asian countries could and why the UPA government after 2004 was wrong to divert their attention almost completely to redistribution policies rather than taking a balanced approach. However, they also mention all the things that India has done in the right direction and the results that such policies have yielded.
Overall, the book is well written. It is easy to read and understand even for a person who is not well versed with economics. The authors put out relevant data and statistics to support their stand. The book provides a good view of how the Indian economy was before 1991, how it changed after that, and what further policy changes should be introduced to help India achieve desired levels of development.
The Book is divided into 3 parts. The first part talks about the "myths" that were prevalent among certain economists and activists regarding India's growth policy post-1991 liberalization. The authors address concerns around the new policy not being inclusive, that it did not help get rid of poverty, that it increased income inequality and that it did not help in the betterment of health and education sector. The authors debunk these comprehensively using relevant data, and also describe the sorry state of Indian economy before 1991.
The second part deals with the "Track 1 reforms", which are reforms aimed directly at increasing economy growth rate. The authors talk in detail about land and labor laws, policies relating to education and infrastructure and suggest ways in which these can be improved.
The final part talks about "Track 2 reforms", which are reforms aimed at redistribution, and help the poorest sections of the society. As in the previous part, the authors here talk about ways to make effective policies for uplifting the underprivileged sections, they talk about employment, nutrition, healthcare and education areas where reforms are most important.
The authors call out the policymakers for absurd decisions, especially in the pre 1991 era. They put out comparison with similar Asian countries to show how India could have done better. They also highlight the fact that after liberalization, India still couldn't achieve what most east Asian countries could and why the UPA government after 2004 was wrong to divert their attention almost completely to redistribution policies rather than taking a balanced approach. However, they also mention all the things that India has done in the right direction and the results that such policies have yielded.
Overall, the book is well written. It is easy to read and understand even for a person who is not well versed with economics. The authors put out relevant data and statistics to support their stand. The book provides a good view of how the Indian economy was before 1991, how it changed after that, and what further policy changes should be introduced to help India achieve desired levels of development.
December 26, 2016
India's Tryst with Destiny' is an economic policy book which supports more reforms and advocates a more active role for private players. Also available under the name, 'Why Growth Matters: How Economic Growth in India Reduced Poverty and the Lessons for Other Developing Countries', this book is written by Jagdish Bhagwati and Arvind Panagariya – two prominent Indian economists. Bhagwati is considered to have started the intellectual support for reforms started in the 1980s and more vigorously in the 1990s. Arvind Panagariya is current chairman of Niti Aayog of India. During these years of economic reform, India’s economy was opened up and 'License Raj' was removed from many sectors. This book is all about evaluating the effects of those reforms and replying to critics arguing against those reforms based on the social indicators. Also, through this book, authors advocate a significant role of private players in education, health, and industry. At few places in the book, authors have criticized Amartya Sen and Jean Dreze for having the view that growth has done relatively little for the upliftment of masses.
Bhagwati and Panagariya mention about the socialism under the Nehru and Indira Gandhi. Although much celebrated as a socialist, Nehru emphasized on production in many speeches and he thought that only more production can provide enough resources to eradicate poverty. Also, criticisms on the basis that Indian planners pursued growth as an end are refuted by the authors as they cite reports from First Five Year Plan drafted by the Planning Commission which gives due emphasis to education and health sector. According to authors, socialism under Indira Gandhi was of different hue and too many permits and licenses were introduced which pleased the ultra-left section of Indian politics, but in the end proved detrimental to the growth. With fewer resources available, the spending on public goods – with social implications – took a hit and India did not show much improvement in social indicators. Citing statistics, authors claim that after 1991, a much larger proportion of the population has been lifted above BPL.
In the first part of the book, authors have debunked many myths surrounding India’s growth story. Comparisons with Bangladesh and China were discussed. In the case of Bangladesh, authors say that West Bengal which has a shared history and geography outperforms Bangladesh. They argue that Bangladesh has better health indicators at the time of independence. In the tumultuous decades of the 1970s and 1980s, these indicators took a hit but present conditions hint towards the return to the post-independence condition. They argue along similar lines for comparisons with China and say that China had a head start of many years. Taking the example of one more myth propagated by few that due to reforms, India is now in the Gilded Age that was in the United States in the late nineteenth century. Authors refute such claims by saying that because of reforms many entrepreneurs with a clean image have risen like Narayana Murthy of InfoSys, Azim Premji of Wipro and Uday Kotak of Kotak Mahindra Bank, and have embraced CSR and PSR. They also say that in contrast to Gilded Age of the USA, the condition of laborers is much better in India.
In the second and third part of the book, authors talk about Track 1 and Track 2 reforms. By Track 1 reforms, they mean reforms in regulations and infrastructure which help in ease of doing business. These reforms include labor laws, land acquisition laws, infrastructure, higher education and agriculture. Authors argue that ease in regulation will help in increasing the firm size. Large and medium firms are known to provide better salaries and facilities as it has been proved in the case of China. Authors also want foreign universities to be allowed to open campuses in India. Even though few faculties might move to these universities from premium institutes like IITs and IIMs, in the end, it will benefit Indian students only. It may also help in the return of educated Indians employed in universities abroad.
Track 2 reforms are in the area of employment, adult education, food security, health care and elementary education. Here also authors argue for a more active role by the private sector as the decades of experience has proved governments to be ineffective in providing these necessities with the presence of massive corruption. In many areas authors, argue against targeted redistribution of in-kind benefits because as long as these benefits are available at the market price the beneficiary always has an option to sell these for a price. They argue more in favor of cash transfer.
This book was structured in a way that it first argues against the myths and then it builds the case for more reforms. Free from too many economic jargons and with technical terms explained wherever possible, this book does not need any prerequisite. To know the views contrary to the authors of this book, a book by Amartya Sen is recommended.
http://www.yayawar.in/2016/08/book-re...
Bhagwati and Panagariya mention about the socialism under the Nehru and Indira Gandhi. Although much celebrated as a socialist, Nehru emphasized on production in many speeches and he thought that only more production can provide enough resources to eradicate poverty. Also, criticisms on the basis that Indian planners pursued growth as an end are refuted by the authors as they cite reports from First Five Year Plan drafted by the Planning Commission which gives due emphasis to education and health sector. According to authors, socialism under Indira Gandhi was of different hue and too many permits and licenses were introduced which pleased the ultra-left section of Indian politics, but in the end proved detrimental to the growth. With fewer resources available, the spending on public goods – with social implications – took a hit and India did not show much improvement in social indicators. Citing statistics, authors claim that after 1991, a much larger proportion of the population has been lifted above BPL.
In the first part of the book, authors have debunked many myths surrounding India’s growth story. Comparisons with Bangladesh and China were discussed. In the case of Bangladesh, authors say that West Bengal which has a shared history and geography outperforms Bangladesh. They argue that Bangladesh has better health indicators at the time of independence. In the tumultuous decades of the 1970s and 1980s, these indicators took a hit but present conditions hint towards the return to the post-independence condition. They argue along similar lines for comparisons with China and say that China had a head start of many years. Taking the example of one more myth propagated by few that due to reforms, India is now in the Gilded Age that was in the United States in the late nineteenth century. Authors refute such claims by saying that because of reforms many entrepreneurs with a clean image have risen like Narayana Murthy of InfoSys, Azim Premji of Wipro and Uday Kotak of Kotak Mahindra Bank, and have embraced CSR and PSR. They also say that in contrast to Gilded Age of the USA, the condition of laborers is much better in India.
In the second and third part of the book, authors talk about Track 1 and Track 2 reforms. By Track 1 reforms, they mean reforms in regulations and infrastructure which help in ease of doing business. These reforms include labor laws, land acquisition laws, infrastructure, higher education and agriculture. Authors argue that ease in regulation will help in increasing the firm size. Large and medium firms are known to provide better salaries and facilities as it has been proved in the case of China. Authors also want foreign universities to be allowed to open campuses in India. Even though few faculties might move to these universities from premium institutes like IITs and IIMs, in the end, it will benefit Indian students only. It may also help in the return of educated Indians employed in universities abroad.
Track 2 reforms are in the area of employment, adult education, food security, health care and elementary education. Here also authors argue for a more active role by the private sector as the decades of experience has proved governments to be ineffective in providing these necessities with the presence of massive corruption. In many areas authors, argue against targeted redistribution of in-kind benefits because as long as these benefits are available at the market price the beneficiary always has an option to sell these for a price. They argue more in favor of cash transfer.
This book was structured in a way that it first argues against the myths and then it builds the case for more reforms. Free from too many economic jargons and with technical terms explained wherever possible, this book does not need any prerequisite. To know the views contrary to the authors of this book, a book by Amartya Sen is recommended.
http://www.yayawar.in/2016/08/book-re...
September 2, 2019
3.5 Stars
My reading was mostly to go through the sen vs bhagwati debate. After having read a masterpiece like 'Uncertain Glory', I was waiting to see how 'Tryst With Destiny' could challenge this.
In some cases, the collision was head-on, like the south-asian comparison of health indicators, Cash Transfers, Health Care and Education.
Some arguments were convincing especially the myth-busting. But most arguments are just in the place of 'good-but-not-convincing-enough' (Like the arguments for Cash Transfers.)
However, I still stand with dreze and sen on healthcare and education. While both agree that government isn't doing great on those, one calls for increased spending to make it better, other calls for private intervention. My view is that most people who argue for private intervention forget the case of U.S. While people in US are currently fighting against the insurance industry and student loans, indian intellectuals are still emphasizing on how privatization would make people here better-off. And also most countries that are doing well on social indicators is because of well funded welfare states(as illustrated in Uncertain Glory)
But in concluding thoughts, I'd say this is a must-read for anyone interested in public policy despite your views to get a well-rounded awareness on policy debates.
My reading was mostly to go through the sen vs bhagwati debate. After having read a masterpiece like 'Uncertain Glory', I was waiting to see how 'Tryst With Destiny' could challenge this.
In some cases, the collision was head-on, like the south-asian comparison of health indicators, Cash Transfers, Health Care and Education.
Some arguments were convincing especially the myth-busting. But most arguments are just in the place of 'good-but-not-convincing-enough' (Like the arguments for Cash Transfers.)
However, I still stand with dreze and sen on healthcare and education. While both agree that government isn't doing great on those, one calls for increased spending to make it better, other calls for private intervention. My view is that most people who argue for private intervention forget the case of U.S. While people in US are currently fighting against the insurance industry and student loans, indian intellectuals are still emphasizing on how privatization would make people here better-off. And also most countries that are doing well on social indicators is because of well funded welfare states(as illustrated in Uncertain Glory)
But in concluding thoughts, I'd say this is a must-read for anyone interested in public policy despite your views to get a well-rounded awareness on policy debates.
January 24, 2016
Fantastic book for understanding the economic development of India and a historical perspective of the policy paralysis that hampers economic growth in India. The views of Bhagwati are quite opposed, and in some way more realistic, to those of another famous India economist Amartya Sen. I find his outlook to be more practical, scientific and evidence based rather than ideology based. Enjoyed the scientific temperament in the arguments - very convincing. The chapter on labour regulations in India is an gem. The fact that a company had to go all the way to the supreme court in order to fire a worker who was found repeatedly sleeping on the job is a wake up call for labour reforms in India.
April 2, 2019
A very informative account of why India did not achieve impressive economic growth in the last 20th century like its Asian peers and how economic reform is undoing the damage. Some main points I enjoyed learning about:
In a country with widespread poverty and an agricultural economy, the comparative advantage in cheap labor allows the country to move its farmers into labor-intensive manufacturing jobs, thus reducing poverty. However, Indira Gandhi’s Socialist policies granted the government monopolistic power in major industries, cast extensive control over the private sector through labor laws excessively protective towards workers and turned away from trade and foreign direct investment to protect domestic firms. This led to 0.3% annual GDP growth from 1965-1975.
In particular, highly protective labor laws translate to very high costs of doing business in labor-intensive industries where labor costs make up 80% of total cost. Chapter VB of the Industrial Disputes Act effectively makes it impossible for an industrial establishment with one hundred or more workers to lay off or retrench workers even if it is unprofitable and is therefore forced to close the unit. Firms can minimize labor-related problems and costs by hiring less than 7 workers.
As late as 2005, 200+ employee firms employed only 10.5% of manufacturing workforce in India, while small firms are not interested in exporting globally and scaling up employment. This lack of large-scale manufacturing firms leads to a shortage of gainful employment opportunities for the majority of the rural population still farming in rural villages. Although India's economic growth has picked up significantly in recent years, it is driven by capital-intensive industries like IT services, automobile and telecommunication.
India has one of the youngest growing populations in the world and is projected to be a main contributor to the global workforce in the next few decades. Against a global context of aging populations in developed economies, this poses a huge opportunity for reducing poverty in India. It is then crucial for the government to increase investment in education, skill development and public health and create employment opportunities in labor-intensive industries.
In a country with widespread poverty and an agricultural economy, the comparative advantage in cheap labor allows the country to move its farmers into labor-intensive manufacturing jobs, thus reducing poverty. However, Indira Gandhi’s Socialist policies granted the government monopolistic power in major industries, cast extensive control over the private sector through labor laws excessively protective towards workers and turned away from trade and foreign direct investment to protect domestic firms. This led to 0.3% annual GDP growth from 1965-1975.
In particular, highly protective labor laws translate to very high costs of doing business in labor-intensive industries where labor costs make up 80% of total cost. Chapter VB of the Industrial Disputes Act effectively makes it impossible for an industrial establishment with one hundred or more workers to lay off or retrench workers even if it is unprofitable and is therefore forced to close the unit. Firms can minimize labor-related problems and costs by hiring less than 7 workers.
As late as 2005, 200+ employee firms employed only 10.5% of manufacturing workforce in India, while small firms are not interested in exporting globally and scaling up employment. This lack of large-scale manufacturing firms leads to a shortage of gainful employment opportunities for the majority of the rural population still farming in rural villages. Although India's economic growth has picked up significantly in recent years, it is driven by capital-intensive industries like IT services, automobile and telecommunication.
India has one of the youngest growing populations in the world and is projected to be a main contributor to the global workforce in the next few decades. Against a global context of aging populations in developed economies, this poses a huge opportunity for reducing poverty in India. It is then crucial for the government to increase investment in education, skill development and public health and create employment opportunities in labor-intensive industries.
August 22, 2021
An interesting quote from the book:
I don't know too much about Indian's modern history but like to learn more about history. I also wanted to learned more about the economic situation there, how it changed over time, and perhaps what can be learned by comparing it to other places.
The main point of this book seems to be that countries with low GDP like India need growth in order to fund their social programs. In order for there to be growth, there needs to be an economic environment conducive for growth. The author also mentions that even developed countries may need to increase growth to avoid having to make cuts to social programs.
The author talks a lot about various "myths" related to certain growth-oriented reforms in India. This seem to be to address specific critics of his ideas. I don't know enough about India's political and economic situation to comment too specifically on any of these, but the author does seem to have a detailed reference section for the claims he makes.
What did I take away from this book:
- Social welfare must be balanced by growth because growth is often needed to fund the social welfare programs without going into debt.
- A lot of specific examples of the challenges and potential solutions for both social welfare programs and growth. For example, to avoid corruption causing leakages in social welfare programs, direct cash transfers to the target groups can potentially help.
- This book can be used as a point of comparison to other books related to these topics.
Mahbub ul Haq of Pakistan reminded us often how arithmetic showed that one less military tank would mean several additional primary schools.
I don't know too much about Indian's modern history but like to learn more about history. I also wanted to learned more about the economic situation there, how it changed over time, and perhaps what can be learned by comparing it to other places.
The main point of this book seems to be that countries with low GDP like India need growth in order to fund their social programs. In order for there to be growth, there needs to be an economic environment conducive for growth. The author also mentions that even developed countries may need to increase growth to avoid having to make cuts to social programs.
The author talks a lot about various "myths" related to certain growth-oriented reforms in India. This seem to be to address specific critics of his ideas. I don't know enough about India's political and economic situation to comment too specifically on any of these, but the author does seem to have a detailed reference section for the claims he makes.
What did I take away from this book:
- Social welfare must be balanced by growth because growth is often needed to fund the social welfare programs without going into debt.
- A lot of specific examples of the challenges and potential solutions for both social welfare programs and growth. For example, to avoid corruption causing leakages in social welfare programs, direct cash transfers to the target groups can potentially help.
- This book can be used as a point of comparison to other books related to these topics.
June 13, 2018
Much about the contents of this book may be debated, but, when it comes to the politico-economic dispositions of authors Bhagwati and Panagariya, nothing can quite be argued to the contrary. They lie squarely to the right of center and aligned with the current (at the time of writing this review) national political incumbency of India.
Right at the outset, the authors make an impassioned pitch to dispel, what in their mind is, undue but recurring pessimism surrounding India's growth story, thus lending credence to the usage of the Indian example as a model worth following. They waste no time in establishing growth in income/output as the headline indicator for economic health of a country, and, using India's economic development experience since Independence as evidence, urge policy makers to drive growth through reforms targeted at i) liberalising factor markets, ii) spurring infrastructure development and iii) strenthening higher education. The authors contend that growth thus achieved will subsequently empower policy makers to unleash redistributive initiatives like delivering i) routine and specialised healthcare services, ii) basic education and iii) employment gurantees more effectively and adequately to the economically disadvantaged sections of the society.
Some of the stridency in the above arguments, however, does ring hollow. A largely unilateral prescription - private participation and increased competition - is proffered for almost all facets of an economy, with near-absent reference on how to build human capacity, which is by far the biggest bottleneck in demographically dense but economically poorer countries like India. In tackling the redistributive initiatives noted above, the authors demonstrate a sweeping predisposition towards direct cash transfers, thereby leaving the choice of consumption of critical services (health, education) to the intended beneficiary. A lot may be construed as wrong here - namely, how do you know that an intended beneficiary (especially one from the economically and socially distraught communities), even if she is provided with adequate cash, will be able to procure for herself the “right” medical care when she doesn’t know what “right” medical care is, in the first place! The mere availability of money, from headline economic growth, is likely inadequate to render solutions to all the travails of a developing economy like India - a more nuanced approach is imperative, which the authors seem to bypass here.
Right at the outset, the authors make an impassioned pitch to dispel, what in their mind is, undue but recurring pessimism surrounding India's growth story, thus lending credence to the usage of the Indian example as a model worth following. They waste no time in establishing growth in income/output as the headline indicator for economic health of a country, and, using India's economic development experience since Independence as evidence, urge policy makers to drive growth through reforms targeted at i) liberalising factor markets, ii) spurring infrastructure development and iii) strenthening higher education. The authors contend that growth thus achieved will subsequently empower policy makers to unleash redistributive initiatives like delivering i) routine and specialised healthcare services, ii) basic education and iii) employment gurantees more effectively and adequately to the economically disadvantaged sections of the society.
Some of the stridency in the above arguments, however, does ring hollow. A largely unilateral prescription - private participation and increased competition - is proffered for almost all facets of an economy, with near-absent reference on how to build human capacity, which is by far the biggest bottleneck in demographically dense but economically poorer countries like India. In tackling the redistributive initiatives noted above, the authors demonstrate a sweeping predisposition towards direct cash transfers, thereby leaving the choice of consumption of critical services (health, education) to the intended beneficiary. A lot may be construed as wrong here - namely, how do you know that an intended beneficiary (especially one from the economically and socially distraught communities), even if she is provided with adequate cash, will be able to procure for herself the “right” medical care when she doesn’t know what “right” medical care is, in the first place! The mere availability of money, from headline economic growth, is likely inadequate to render solutions to all the travails of a developing economy like India - a more nuanced approach is imperative, which the authors seem to bypass here.
July 9, 2020
It was very difficult to develop an opinion of this book because of the very different ways I felt about the components:
- Research - 5 stars
- Logic - 4 stars
- Track 1 (growth) Reforms - 5 stars
- Track 2 (redistribution) Reforms - 3 stars
- Prose - 3 stars
The prose in particular threw me off several times with some of the adjectives used to describe their opponents. That said, the content is still solid, and gave me a better understanding of India’s economic / political history and how they can build on their progress. India is going to be a very important partner to the U.S. in the coming decades. Glad to see they seem to be on a good track at this point.
- Research - 5 stars
- Logic - 4 stars
- Track 1 (growth) Reforms - 5 stars
- Track 2 (redistribution) Reforms - 3 stars
- Prose - 3 stars
The prose in particular threw me off several times with some of the adjectives used to describe their opponents. That said, the content is still solid, and gave me a better understanding of India’s economic / political history and how they can build on their progress. India is going to be a very important partner to the U.S. in the coming decades. Glad to see they seem to be on a good track at this point.
May 30, 2017
The book asserts that growth of per capita income is important to eradicate poverty and inequality. The book has tried its best to bust the myths associated with the downsides of an open economy but as a reader, I didn't find it effective as the arguments are weak and open ended at times. Too many references in the text itself make the process of reading cumbersome. I expected more areas of reform to be mentioned in the text which was a bit disappointing.
August 29, 2018
Informative, but far too sure of itself and dismissive of those who disagree with its central thesis. Some arguments, such as the explanation for the success of Kerala, are relatively convincing; others, such as the idea that the decline in calories and protein in Indian diets despite growth is because of a move toward fattier and/or more sugary foods and a decrease in physical labor, are much less convincing.
May 9, 2020
Magnificent book. A simple and carefully argued defense of economic growth policies using India's history, and policy climate. An important addition to the toolbox of policymakers and analysts alike in a world where ideological goals and false empirical standards now dominate development thinking.
February 16, 2024
The economic narrative is very much appreciated, and the reasoning makes sense. The very specific context of the Indian economy is what makes me hold off the last star, as it loses some of the entertainment value for me, but I like the book as a piece of economic history/narrative.
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February 19, 2017I read his book In Defense of Globalization. it is what the title says. but I can t find it.
one student of political science said that in any regard Globalization is destructive. it has a tick in every box. Bhagwati deals with each tick box by box. On the basis of research.
It is not to say their are not problems but clearly most have been distorted.
I m never sure what the alternative to world trade is. The argument that we can somehow get along with no rule of law i.e. systems of arbitration between nations seems ludicrous. might is right - which is what China wants and Mr. T wants - just aren't conducive to peace.
and the point that we are less likely to bomb a trading partner is a good one
It is a well supported argument and largely blows away the fluff promoted by Poly Sci departments everywhere.
one student of political science said that in any regard Globalization is destructive. it has a tick in every box. Bhagwati deals with each tick box by box. On the basis of research.
It is not to say their are not problems but clearly most have been distorted.
I m never sure what the alternative to world trade is. The argument that we can somehow get along with no rule of law i.e. systems of arbitration between nations seems ludicrous. might is right - which is what China wants and Mr. T wants - just aren't conducive to peace.
and the point that we are less likely to bomb a trading partner is a good one
It is a well supported argument and largely blows away the fluff promoted by Poly Sci departments everywhere.
August 14, 2013
The book gives a very compelling argument about why reform driven growth is important and how it can dispel poverty and lead to a more equitable if not perfectly equal distribution of wealth. Dr Bhagwati starts with explaining why Indira Gandhi's policy of nationalization and complete state control over industry bad and how reforms do exactly what the pre-1991 Prime ministers tried to achieve through their restrictive industrial policies. He then leads to what are the different set of reforms that any developing economy in general and India in particular must carry out to make the transition from a poor developing economy to a dynamically growing economy. The authors also provide an analysis and pitfalls of recent Right to education and Food security bills brought up by the incumbent Indian government. Unlike what media made out of Dr Bhagwati's argument against Amartya Sen (or at least what I understood), Dr Bhagawati too advocates government driven social welfare schemes to pull up the poorest of poor out of poverty and bring them to a level where they can sustain themselves and grow.
All in all, the book looks like a ready-made economic policy guide for developing nations and does a very good job of covering the development strategy for various aspects (like economy, human development index, education and infrastructure) of what constitutes a developed nation.
All in all, the book looks like a ready-made economic policy guide for developing nations and does a very good job of covering the development strategy for various aspects (like economy, human development index, education and infrastructure) of what constitutes a developed nation.
April 17, 2015
The book has been divided into three parts. First part details the authors' replies to the myths being perpetuated in recent times regarding the economic policies followed since independence. Second part deals with reform measures suggested by the authors to take India to a higher growth trajectory so that social goals can be achieved. Third part deals with reform measures in the socio-economic policies and how the goal of welfare of the people can be achieved.
In my opinion the first part is the weakest in terms of the arguments put forth by the authors. Some of the myths that they seem to bust are not so serious or compelling that they deserve a mention here.
But after that the book attains a completely different level in terms of the content and arguments put forth by the authors. the remedies suggested in second part are presented in a very simple manner, supported by data.
The third part is also excellent in terms of measures suggested but i think more could have been written.
Maybe the authors kept it short in the hope that the measures for growth as suggested by them are adopted and succeed, and then the enhanced revenues will enable us to think of newer measures for the welfare of the people.
Overall a good read.
In my opinion the first part is the weakest in terms of the arguments put forth by the authors. Some of the myths that they seem to bust are not so serious or compelling that they deserve a mention here.
But after that the book attains a completely different level in terms of the content and arguments put forth by the authors. the remedies suggested in second part are presented in a very simple manner, supported by data.
The third part is also excellent in terms of measures suggested but i think more could have been written.
Maybe the authors kept it short in the hope that the measures for growth as suggested by them are adopted and succeed, and then the enhanced revenues will enable us to think of newer measures for the welfare of the people.
Overall a good read.
August 11, 2015
Well researched and backed with statistics. It shows how the socialist model of Indira Ghandi's Congress Party impeded growth in India and unnecessarily kept the poorest in crushing poverty. It shows how the liberalization of the economy since 1991 has reduced poverty and enhanced the lives of many Indians. I must point out that the book argues for liberal markets not libertarian ones. A more productive economy provides an income stream that the government can use to help those at the bottom. It is pointed out in this book that the measures adopted by India to reduce poverty previously had been both inefficient and ineffective. The book argues for increasing liberalization of the economy, free trade and the application of bio technology. Much of this book will be unpalatable reading to the left but read it they should. To revert to failed policies of the past is the clarion call of much of the left today. This call is often made by the well fed chattering classes of the developed world. The prescriptions that they have proposed have been abandoned in many countries leading to the stunning economic transformation of countries such as Korea, Vietnam, China and others.
June 1, 2016
This tiny little book has a very succinct message: Growth matters.
There is a lot of optimism in this book compared with the (objective)bleakness of Jean Dreze's "An Uncertain Glory". It's arranged in such a way that you have some myths being debunked: essentially saying that the notion that growth hasn't touched all parts of India. It has; and even if it hasn't redistribution to do so can only happen once the pie is made larger.
It then goes on to talk about what reforms the government must make in two broad categories: Tier 1 and Tier 2. The first category directly affecting growth(like allowing FDI, labour and land reforms etc.) and the second affecting growth indirectly(Think education and health). Bhagwati stresses a lot on reforms to be undertaken by the government, as one sure way to ensure prolonged periods of growth.
All in all, a short read that you can definitely give a day to.
There is a lot of optimism in this book compared with the (objective)bleakness of Jean Dreze's "An Uncertain Glory". It's arranged in such a way that you have some myths being debunked: essentially saying that the notion that growth hasn't touched all parts of India. It has; and even if it hasn't redistribution to do so can only happen once the pie is made larger.
It then goes on to talk about what reforms the government must make in two broad categories: Tier 1 and Tier 2. The first category directly affecting growth(like allowing FDI, labour and land reforms etc.) and the second affecting growth indirectly(Think education and health). Bhagwati stresses a lot on reforms to be undertaken by the government, as one sure way to ensure prolonged periods of growth.
All in all, a short read that you can definitely give a day to.
December 13, 2014
pretty much what one would expect on reading the name of the authors.
From the defence perspective, not a very convincing one, though some points and arguments were well framed and logically expressed.
From the attacking perspective, a very cheap attempt must say. Their stringent stand against Sen and Dreze were not very well encapsulated and leaves the reader wondering how such emminent scientists get involved in a cat fight!!
Overall I liked their expression of various facets of Indian economy and of growth in general. Though I do not subscribe to their view fully. It certainly made an impact on me, from the view that it did change my mindset towards the importance of growth.
Would be interesting to read one of Sens and Drezes book now !
From the defence perspective, not a very convincing one, though some points and arguments were well framed and logically expressed.
From the attacking perspective, a very cheap attempt must say. Their stringent stand against Sen and Dreze were not very well encapsulated and leaves the reader wondering how such emminent scientists get involved in a cat fight!!
Overall I liked their expression of various facets of Indian economy and of growth in general. Though I do not subscribe to their view fully. It certainly made an impact on me, from the view that it did change my mindset towards the importance of growth.
Would be interesting to read one of Sens and Drezes book now !
June 13, 2015
Conceptually, this is a pure neo-liberal case for free-market reform, which the authors set up by pointing out that Nehru's (the symbol of the Indian left) father sent his laundry to Paris. The problem is that it reads like an academic paper that is slightly divorced from ground reality.
There's also a lot of mental gymnastics where India is constantly compared to China (but India is democratic!), inequality is justified (it's only shown in elaborate weddings but that's "cultural"), and every shortcoming is explained by twisting metrics across arbitrary cross-sections to suit the authors' agenda.
A plus point is that there is a lot of raw data to sift through to draw your own conclusions, though there is nothing informative about the authors recommendations.
There's also a lot of mental gymnastics where India is constantly compared to China (but India is democratic!), inequality is justified (it's only shown in elaborate weddings but that's "cultural"), and every shortcoming is explained by twisting metrics across arbitrary cross-sections to suit the authors' agenda.
A plus point is that there is a lot of raw data to sift through to draw your own conclusions, though there is nothing informative about the authors recommendations.
April 28, 2015
A balanced book. Bhagwati and Panaghariya offer both a pat on the back and a deserved rebuke. For Indians who think we have achieved nothing as a nation in last six decades, the book offers an almost satisfying response with hard facts and figures. For Indian who feel there is no hope from here but only a dark gutter, the book tries to offer solutions. The book both criticizes and proposes solutions. The only flaw that I felt throughout the book was that because of their intense support for an open market based economical system, sometimes the analysis went overboard and missed some practical aspects.
Overall, a brilliant analysis by two brilliant economists.
Overall, a brilliant analysis by two brilliant economists.
January 12, 2016
Debunking the myths - yes true in some cases , however some of the listed 'myths' do not logically categorize as a myth . For eg - “Growth is not necessary for poverty reduction , redistribution alone is sufficient” . Why would anybody want to believe this and why would anybody spend effort on explaining that it is a myth! Anybody who knows the post-colonial status of India would evidently know that growth is required.
However good proposals towards the way forward for India, though there is a an impression of blind belief in privatization assuming public systems are and will ever be that efficient.
However good proposals towards the way forward for India, though there is a an impression of blind belief in privatization assuming public systems are and will ever be that efficient.
July 19, 2018
The book throws light on a different perspective to evaluate post- independence Indian economic policies against the conventional & dominating thinking prevalent in the country. It boldly negates the myths deliberately created to support particular ideology which sometimes not always fit to create economic prosperity. The obsession to particular ideology to create an utopian world of egalitarian society does not seems to have patience to even generate the resources for it, thus they end up or are satisfied by creating uniformly deprived societies. The book awakens us to undo the historical blunders committed over the years.
October 4, 2017
The book correctly debunks a lot of myths that has lynched over the Indian Economy. It also rubbishes the mediocre and baseless viewpoints of certain policy makers in the country. It provides a solid statistical model for each myth getting debunked. Overall an person with economics curiousity will love it!
The book is a bit leftist, supports a political party in an unsaid way so don't let it form an impression on you. Read it with a neutral mind and you'll know the economic shortfalls and shortcomings of our country.
The book is a bit leftist, supports a political party in an unsaid way so don't let it form an impression on you. Read it with a neutral mind and you'll know the economic shortfalls and shortcomings of our country.
April 23, 2020
Fabulous book by two great economists that lays into the socialist economics prescribed for decades by povertarians like Amartya Sen and Jean Dreze. Apart from the debunking the povertarians, the book also delves deeper into possible reforms that would allow India to avoid the middle-income trap.
It was also heartening to read how numerous reform solutions offered by Professor Panagariya have actually been implemented under the current BJP government, especially during Panagariya's stint as Former and inaugural Vice Chairman, Niti Aayog.
It was also heartening to read how numerous reform solutions offered by Professor Panagariya have actually been implemented under the current BJP government, especially during Panagariya's stint as Former and inaugural Vice Chairman, Niti Aayog.
February 15, 2016
While the writers are highly respected economists, the book disappointed me with the lack of depth. For example, electricity reforms have just one page devoted to it. Also, the book has a tone of describing problems in generality rather than talk of specific solutions.
Having said that, the topics it raised were relevant. Maybe I will pick up 'India-The Emerging giant' by Panagariya which i gave up on earlier bcoz of its heavy bulk.
Having said that, the topics it raised were relevant. Maybe I will pick up 'India-The Emerging giant' by Panagariya which i gave up on earlier bcoz of its heavy bulk.
March 16, 2020
The ‘critics’ are attributed summaries in the form of reductionist one-liners which are haughtily referred to as myths, perhaps what the authors gathered, and serve as imaginary punching bags for them to display their shallow, nuance-lacking and unproven upper-cuts and jabs. This book is a one-sided assault without any self-reflexivity since there is no need to brace for retaliation from discordant views in this rigged match.
September 14, 2013
Gives the reader a good foundation on the recent economic history of India. However, does not make a compelling case for why growth matters and the reforms the authors recommend to improve growth for India.
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