BHANDARE--REFORMS

Recovery,Reforms and Resilience in India by S.S.Bhandare,C.S.Deshpande and Manesh Soman;Published by Konark ; Pages 184 ; Price Rs.800/-

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The book under review has three authors who are acknowledged authorities in their field of studies. S.S.Bhandare was former Economic Adviser to the Tata Group and Chief Economist of Maharashtra Economic Development Council. He is co -author of two books. C.S.Deshpande is Professor of Economics at the Welingkar Institute of Management Development and Research. He was Member of several Expert Groups appointment by the Government. Mangesh Soman is a corporate economist and prolific contributor to financial journals.

The book is a critical assessment of the trends and main facets of the Indian economy as it evolved from May 2014, when the Modi government was formed. Its main objective is the evaluation of the economic policies and performance of the new government and throw light on areas crying out for attention and firm action.

The Modi government was hailed for the introduction of game-changing reforms which included the Goods and Services Tax( GST), the Insolvency and Bankruptcy Code (IBC) and the highly controversial Demonetisation.

The first chapter  presents a macroeconomic profile of India as it has evolved over the last ten years.A very cogent comparison is presented of the economy's progress during the five years of Modi compared with the performance during the preceding five years. The government policies are also reviewed. The analysis is done from two main perspectives--"Economic Growth" and " Macroeconomic Stability". The  overall economic situation today has vastly  improved  over the position prevailing exactly five years ago.The policy initiatives have been in the desired direction and at reasonable speed.

The second chapter critically reviews the policy framework of Agriculture  and analyses the diverse schemes introduced by the new government. The novel e-NAM mechanism has also been considered in depth.The emphasis in the past had been more on agricultural output rather than on farmers' income.The narrative has changed now and emphasis is on farmers' incomes.

Chapter Three on Investment, Industry and Trade is devoted to the policies and performance in three parameters--Investment including FDI, Industrial Growth and Export performance. The Modi government has emphasised on industrial revival and on employment generation. Major initiatives have been taken by the government, such as 'Make in India',FDI liberalisation and EoDB initiatives.

Banking and Financial Sector is the subject of Chapter Four. It offers a detailed explanation of the present challenges facing the sector and analyses the environment and implications for the stability of this important sector. There is a mixed sense of achievement of achievement. The problem of NPAs and Mudra have been  studied carefully by the authors.

Demonetisation was an unprecedented event in India's economic history. This subject forms the subject of the next chapter which provides a perceptive analysis of the giant step which struck every Indian--high and low. Demonetisation was a gigantic, well-intended experiment of the Modi government but one has to wait for some more years to get a fuller picture.

Another highly controversial act of the Modi regime was the introduction and implementation of  G S T--a truly game-changing reform. Chapter Six thoroughly analyses GST tracing its history and rationale.The three economists evaluate the operational challenges faced by all the stakeholders. G S T has been a big leap for a nation accustomed to incremental reforms and the authors believe it could only be a matter of time before we start realising greater economic benefits of this reform.

The concluding chapter is an account of the findings and observations of the authors and outlines their recommendations.The authors have analysed the problems facing the second government of Modi. They have adumbrated a six-point agenda to which the government have to give immediate attention.

The points are given below.

1.Establishment of Statutory Economic Council of States to drive consensus on and implement nextGen

economic reforms.Authors say that government should explore the idea of creating a permanent Economic Council of States with NITI Ayog as Secretariat.

2.Revitalisation of FRBM Framework--an Independent Budget Analysis Wing  should be set up on the lines of the Congressional Budget Office in the U S.

3. Investment Monitoring and Facilitating Agency backed by appropriate legislation, giving it powers and responsibility to follow-up on  various clearances and ensure project implementation..

4.Empowering the National Statistical Commission. The statistical system of the country has to be freed of interference from all government agencies.

5.Prioritising Administrative Reforms. Government must pursue 'Minimum government and Maximum Governance'.

6.Strategising India's interaction with global economy.  Authors recommend building up a National level Forum to navigate through the global economic trends--strategising external trade and foreign investment flows.

The authors conclude that at the close of Modi's first term "the stress on farmers, apparent gap in jobs creation and continued weakness in investments and exports have hogged headlines...and rightly so. .. The economy needs a lot of elements to fall in place..."

In a brief Foreword, Dr.Narendra Jadhav, Rajya Sabha Member, writes ,"On the whole, this book presents a critical, yet unbiased record of how the Modi government has performed on the economic front; and will be a valuable report card for all those looking for an incisive analysis while evaluating the five-year tenure of the government. It recognises the achievements of the government and shows a path of what needs to be done to take care of the persisting gaps."

The book will be of immense use to all students of economics, public welfare, bankers and policy makers.

P.P.Ramachandran.

26/01/2020.