Plenty's Scarcity

Review of Eight Lectures on India’s Economic Reforms by T. N. Srinivasan 

New Delhi: Oxford University Press, 2000.

Arvind Panagariya

            These eight gems, cut and shaped to perfection by a master craftsman, offer the reader a panoramic view of the economic reforms undertaken by India since 1991 and those that still await it.  Do not be deceived by their small size (eight of them together span over less than 100 pages): they hold the potential to illuminate the layman and the connoisseur alike.  Anyone undertaking a short journey and wishing to give himself a crash course in the Indian economy will be well advised to take this book along.

            The book brings together eight lectures that Srinivasan delivered in July 1998 as the first Visiting V. K. R. V. Rao Professor at the Institute of Social and Economic Change in Bangalore.  The lecture format imposes a certain discipline, especially on the length, which the author has put to good use by confining attention to the core themes.  In turn, each lecture is devoted to a different area of policy, leading to a wide coverage of topics that include industry, agriculture, poverty alleviation, fiscal issues, infrastructure, education and health, financial sector and international trade and investment.

            With the debate on the impact of reforms on poverty, and by implication the desirability of reforms, in full swing, the book is especially timely.  In the third lecture, Srinivasan offers a careful account of the centrality of poverty alleviation to India’s planned development.  He questions the assertions by western economists and development agencies that developing countries were fixated on income growth and neglected human development and reminds that ‘in India, the objective has never been growth per se but only growth as an instrument for poverty alleviation.’  He places the blame for continuing high incidence of poverty in India where it belongs: ‘the massive failure to achieve rapid growth.’  Of the 17 percentage points reduction in the population below the poverty line over the period 1951-55 to 1993-94, as much as 15 percent is to be attributed to growth and only 2 percent to redistributive policies.  While this implies growth-oriented policies as the key to poverty reduction, Srinivasan also recommends redirecting anti-poverty programs, currently subject to much abuse by those already above the poverty line, towards increasing the access of the poor to health and education.

            Poor infrastructure has been a key bottleneck in India.  In the sixth lecture, Srinivasan offers many suggestions on what needs to be done in the important areas of telecommunication, power and transportation.  In telecommunications, he recommends opening entry to all companies to provide all services throughout the nation rather than limiting it by location and the type of service.  In power, he welcomes the efforts of many states to privatize the generation and distribution of electricity along with the creation of a regulatory agency for power.  In civil aviation, he laments the ‘unconscionable delay’ in deciding on the entry of the Tata-Singapore Airline and the consequent withdrawal of the proposals.

            Even though the lectures focus principally on the ongoing reforms and their future course, they are liberally flavored with historical background.  The discussion of poverty takes us back to Dadabhai Naroji, on industrialization to M. Visveswaraya, and on financial-sector regulations to Kautilya.  And there are, of course, numerous references to the influence of Pandit Nehru in virtually all areas.  Informed readers from all fields, including economics, will find the book interesting and illuminating. 

India Today, June 12, 2000