India: The Emerging Giant

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India: The Emerging Giant | Asia Society

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India: The Emerging Giant

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India: The Emerging Giant

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Barry Eichengreen, Poonam Gupta, and Rajiv Kumar

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However, India's growth in the decade before the reforms matched its growth in the decade after. He believes India's response to the reforms owed a lot to the groundwork it laid in the s and even earlier, when it acquired a skilled workforce and industrial experience, unharried by foreign competition. Bolder, earlier reforms would not necessarily have served India better. Mr Panagariya rejects this argument and even Mr Subramanian seems ambivalent about it.

Later in his book, he argues that the pre-reform era has skewed India's development in ways that are not entirely welcome. Its businesses were herded into heavy industry, chemicals and engineering, leaving the economy reliant on capital and credentials, rather than the unskilled labour it has in abundance. This has allowed India's most successful companies to prosper despite the onerous labour regulations which protect a minority of job-holders at the expense of legions of job-seekers.

But precisely because these companies have learned to live with these laws, they do not lobby particularly hard to repeal them. The author notes a similar pattern at work among India's newly affluent classes. Rather than fighting to reform its ailing public institutions, they opt out of them, enrolling their children in private schools, installing their own generators and gating their communities.

India: The Emerging Giant

This is a reasonable response to poor public provision, but it is dangerous. According to Mr Subramanian, crime is rising in India's richer states and armed insurgencies now threaten a quarter of its districts. These two books seem to be fighting different battles.