State, economy, society, nationhood: A new book charts India’s development story

What makes the growth and structural transformation history of India particularly interesting is the fact of a major turnaround in economic growth that also allowed some of the stymied structural transformations to be turned around, even if partially and differentially. These changes defy easy explanations, especially for the underperformance of the planning era. For example, the Bardhan rendition that three sets of vested interests – bureaucrats, politicians and industry – thwarted reform and growth in the planning era runs into the problem that these same interests were unable to block what turned out to be dramatic changes in India’s fortunes – for the better – beginning in 1980.

There is little dispute that India’s growth turned around in the early 1980s. Economic growth soared from about 3.5 per cent to close to 6 per cent in the 1980s. The differences relate to characterising that dramatic improvement.

The Left embraced the rising growth because it was due to a rise in government spending, especially in public investment, and an increase in domestic savings. The Right dismissed the growth as unsustainable and blamed the very factors praised by the Left, namely, Keynesianism on steroids. In this view, the crisis of 1991 is evidence of the unsustainability...

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