Book review: Everything that’s wrong with India’s development story

India’s development miscarriage is a bustling genre. Devesh Kapur and Arvind Subramanian’s A Sixth of Humanity is the newest interpretation in this rich field of memoir, biography, history and research. Kapur, a political scientist, and Subramanian, an economist with a past stint in a high government office, are well-equipped to enquire into the political economy conditions under which India has tried to develop in the past 75-plus years.

They trace this arc through five ideological phases: The planning phase from 1950 to 1980; the partial and gradual liberalisation of the 1980s; the neoliberal phase from 1991 to 2010; the post-global financial crisis phase from 2010 till the covid-19 pandemic in 2020; and the post-neoliberal phase in which India is embracing protectionism and industrial policy of the sort that South Korea and Japan successfully dabbled in, in the 1960s, by promoting select conglomerates as national champions, and state capitalism echoing the Nehruvian era.

This is a neat framework that can be used to examine how ideological churn, or the lack of it, has shaped the national experience, delivering the country where it finds itself today. The book doesn’t do that. Instead, it seeks to understand select development failures that have persisted despite the ideological shifts in policy regimes—the slow and subpar improvements in school-learning outcomes and adult height, an indicator of well-being, and an inability to provide decent jobs to the vast majority, which has resulted in rising economic disparities, insecurities and discontent. It doesn’t quite succeed. The data is striking. The reasoning—a regressive society, superficiality of elites, weak state capacities, democratic pressures—isn’t.

The great deal to examine that lies between civilisational characteristics and democratic wranglings is passed over. We don’t read scholars of such eminence merely for an innovative data-based summary of blunders that are obvious and well-documented. A chronicler’s job is to identify the compromises and expose the shibboleths. It’s our loss that the authors don’t reach definitive explanations for why India’s problems resist resolution.

The introduction says the book’s “aim is to change how people think about India." We are used to thinking about India as a messy but proud democracy. The authors seek to make us reconsider: “Changes in the economy have been cumulatively for the better, the same cannot be said of the dramatic changes in the country’s politics… The Indian state has become more illiberal, opaque, authoritarian and majoritarian. Indian society appears to be sliding from transactional communalism to institutionalized bigotry."

India’s superpower has been that just when all seemed lost—the Emergency, the 1991 economic crisis—the country pulled back from the brink and advanced more purposefully. We refuse to despair, and hold on to optimism in spite of inescapable realities that don’t make the national agenda—from Delhi’s dirty air to fewer women in paid work. The cynical side of the authors may dumbfound many readers: “India—encompassing its unique and messy combination of State, society, market and politics—is a civilisational entity and, like the Titanic, slow to advance and impossible to dramatically alter its course."

The book’s problem is not its loss of confidence in “India’s dynamism" but what led the authors there. It is too simplistic to say that “Democracy has been double-edged in its consequences for the nation’s development" and fault the “atavistically statist attitudes captured in the Hindi expression ‘mai-bap sarkar’" for governance failures. It is worth asking: Are India’s development lapses a failure of economics or politics? That is a question modern chroniclers cannot avoid. The authors don’t even ask the question.

An important question that the book does ask is why ending socialism in 1991 hasn’t ensured jobs more than three decades later, and ascribes this failure to hobbled supplies of power, land and freight. But those are the symptoms, not the cause of the malaise. The authors have collated impressive evidence from government and Parliament reports to show that the decision-makers have information on the policy failures and gaps. They wonder why such a “self-reflecting state" isn’t “self-correcting" and fault democratic pressures and the political economy of vested interests.

India’s neoliberal success remains incomplete and subpar because the political parties could not commit to the ideological changes in the policy regime. The missing piece in the book is this tension between policy and the polity. We know that the 1991 economic crisis had opened a window to secure political legitimacy for policy reform. The desperate external situation shook the polity enough to make it take up serious emergency measures to overcome the crisis. “We had come up against a blank wall," former Prime Minister P.V. Narasimha Rao famously said. But the opportunity this moment offered was not fully capitalised.

The Rao government (1991-96) backtracked on reductions in fertiliser price subsidies, for instance, that the politically lightweight technocrat finance minister Manmohan Singh had announced, as Jairam Ramesh details in his book, To the Brink and Back: India’s 1991 Story. recounting the manoeuvring of the Congress’s heavyweights. The economically insidious fertiliser subsidy survives, as Kapur and Subramanian discuss with much bewilderment.

Suresh D. Tendulkar and T. A. Bhavani’s seminal book on India’s political economy, Understanding Reforms: Post-1991 India, showed that crises aren’t a sufficient condition for reforming the political economy. In a crisis situation, those that reforms affect adversely are forced to lie low. The political leadership makes a decisive difference in ensuring that an opportunity for policy corrections is not missed or seized half-heartedly.

Rao described liberalisation as not intended to be total privatisation, although it did mean massive addition to private investments. This reflected his “half commitment, half exigency attitude" to reforms initiated in his tenure in Tendulkar and Bhavani’s assessment. The Rao government didn’t go through with systemic reforms. Crisis over, the reforms ceased. This was not policy’s failure. The conflicts between the requirements of governance dictated by liberalisation and globalisation and the ideological bases of socialism and economic nationalism that had permeated the mindsets of political leaders and supporters needed to be sorted out by political parties. The Congress party ducked.

Ideological resistance to reforms in the BJP, especially privatisation, is no less. Tendulkar and Bhavani write that then party president L.K. Advani, when asked in 2004 whether the party had made compromises with its traditional ideology, replied: “Either you decide that you are going to be an ideological group, which will remain a pressure group in Indian politics, nothing more, nothing less. But if you aspire to become a ruling party and give real governance to the country, you have to compromise." Advani and Atal Bihari Vajpayee were seen by the labour unions and other organisations affiliated to the party as sell-outs for carrying out a few economic reforms. Perhaps in response, the current government, led by Narendra Modi, turned towards protectionism and industrial policy in 2018 to promote growth and started implementing the BJP’s social agenda and political ideology of Hindutva.

The ideological baggage of both the parties ought to have become lighter with time, as the political importance of economic growth became apparent for funding elections and gathering votes. Growth has proved a powerful instrument for financing orderly redistribution—to resolve legacy distributional conflicts and soothe the temporary but real pain of structural adjustment and rising disparities triggered by reforms.

Kapur and Subramanian call this fiscal spending for redistribution “welfarism". But it is also a way to secure political legitimacy for growth-oriented policies. “We desist from peddling facile prescriptions… as if all that is needed is to pull some policy levers and expect that the country’s long-standing pathologies, some civilization-ally encrusted, can be easily cured," they write. Economists tend to look past immediate adjustment pangs and the political costs in the interim. Politicians must figure how these will play out and if they are worth taking. Those with vision take unborn voters into consideration.

Puja Mehra is Consulting Editor, Mint, and author of The Lost Decade (2008-18).