UMA KAPILA

                                    

India’s Economy—Pre-Liberalisation to GST ; Edited by Dr.Uma Kapila ; Published by Academic Foundation; Pages 737 ; Price Rs 1295/-

                           *******************************

The book under review is a magnificent tribute to Shri.Raj Kapila. He had an excellent training in the Delhi School of Economics under the guidance of some of the leading economists of India. His intellectual interests were wide-ranging but his interest in economic policy issues was uppermost.  He was independent minded in his thinking as well as in articulation. He got into economic journalism as it gave him full freedom of thought and expression. This conjoined to his academic attainments led to the creation of the Academic Foundation which under his leadership and the diligent work of his family has grown to become India’s premier publisher of books on social studies, especially economics. Kapila’s Himalayan efforts along with Dr.Uma Kapila and their sons met with extraordinary success. Leading economists vied with each other to get their books published by Academic Foundation. Uma Kapila is a revered teacher of economics, author of a number of books and currently Editorial Director of Academic Foundation.

This book is a tribute to Raj Kapila and is edited by his wife Uma Kapila who has spent 55 years together. Raj’s first book  “The Time Demands-A Politico-Economic Analysis of Present Day India” was published in 1966. Six years later he brought out “India at Cross—After 25 years of Independence”. Both books were based on extensive interviews with personalities from many fields. He always stressed that we cannot lose sight of the persisting poverty, unemployment, inequality, illiteracy and poor health of our population. He firmly believed that integrity, honesty and hard work should be the foundation of our society, politicians and policy makers.

This book, which has a “Foreword” by Dr.Manmohan Singh, has 31 chapters spread over three parts. The “Prologue” has two chapters and an Introduction by the Editor. Since Raj Kapila was from DSE we have a delightful assessment of the “Saga of Delhi School of Economics” by K.L. Krishna which is a treat for all the students and teachers of DSE. We have vivid pen portraits of the “Great Ones”—V.K.R.V.Rao, K.N.Raj,Sukhamoy Chakravarty, A.L.Nagar, M.N. Chaudhri,Suresh Tendulkar and Raj Krishna.

  

Nineteen chapters of Part Two of the book are dedicated to the macro-issues of India’s economic development and cover a number of important topics. We have a graphic assessment  of India’s economic development from the beginning and a detailed account of the 25 years of economic reforms. What was its impact on poverty, inequality, growth and social opportunity and also regional inequality in development . A close analysis follows of the challenges posed by new features such as digitisation, demonetisation, conditional cash transfer, goods and services tax. The other important subjects covered thoroughly are monetary and fiscal policies, federalism, policy regulations,demographic dividend and ecology issues and the rationale of specific economic theories.

Ten chapters in Part Three are devoted to sectoral issues and challenges and tackle subjects like agriculture, industry, banking and the external sector.

In a brief review it will be difficult to cover all chapters.

C.Rangarajan covering the journey of India’s economic reforms analyses market failures and the State’s role. The severe economic crisis, triggered by a serious BoPs problem in the year 1991 was converted into an opportunity to effect some fundamental  changes in the content and approach to economic policy. Manmohan Singh spearheaded the economic reforms for which political support was provided by Narasimha Rao.

Mahendra Dev skillfully assesses the dimensions and trends in inequality at the global level and Indian as well. While policies have been implemented resulting in India’s tremendous growth potential, we have to take care to begin a process of social transformation that ends discrimination on the basis of caste, class and gender. We need strong movements to reduce social exclusion. The agenda of inclusiveness and equality has to be given highest priority for broad-based social and economic development.

According to Y.V.Reddy,  there was an attempt at the recent demonetisation programme to accelerate significantly “digitalisation of payment transactions". However, he points out to the downsides to digitalisation, its direct and immediate impact on black money and corruption is negligible.

    

A.Vasudevan  notes the welcome development of the emergence of a number of challenges—the cost of use of different modes—the regulatory framework and how quickly disputes could be settled and safety costs and loss of privacy. He points out that the costs involved for developing a robust infra-structure including the required skills and innovations in technology as well as sufficient number of sound application and solutions are phenomenal.

C.H.Hanumantha Rao tackles the problem of growing inequality in regional development. Inter-state inequality of gross state domestic product(gsdp) has increased in the post-economic reforms period from the early 1990s. Richer states have grown faster than the poorer states. The regional inequality in per capita gsdp growth is even greater since the poorer states have experienced faster population growth.

M.Govinda Rao in a scintillating chapter on GST analyses it as a “Game Changer  and reform of the century ". He warns, "There are concerns about the rates of tax, mandated compliance and glitches in transition and investment activity which is virtually at a standstill”.

Vijay Kelkar mourns that the approach adopted by the authorities robs the GST of its efficiency enhancing potential because of multiple rates ; different rates for goods and services ; high rates for retail level and leaving out infra-structure sector such as construction, unworkable assets.

Deepak Mohanty has written a brilliant analysis of how monetary policy evolved over eight decades since the RBI  was established in 1935. Formulating monetary policy is an ever-evolving process in response to and as a consequence of changes in financial markets and the real economy.

There are a number of crucial parameters discussed by eminent authorities and as the Editor concludes  “ Development is multi-dimensional. It has to be inclusive. We cannot take pride in being the fastest growing economy if we are not able to ensure a more human and just world for all Indians”.

Mention must be made of the cornucopia of references appended to each of the chapters. We have an impressive number of tables and figures which add value to the narration.

No better tribute could be given to Raj Kapila than this volume of rich contributions by the great teachers of the country.

P.P.Ramachandran.

​​08 / 10 / 2017