The hollow hype

To call a country an 'emerging giant economy' where rural inequality has remained unchanged and urban inequality has worsened can only be a half-truth. To continue with his half-truth, Arvind Panagariya fails to find any link between economic reforms and farmer's suicides in the country. Conversely, the author argues, open policies and rapid economic growth are the best antidotes for poverty reduction. The glossy picture of the Indian economy may have very little to do with Indian reality but the author seems to insist that is the only way.

Having spent a significant part of his professional career with the global financial institutions like the World Bank and the IMF, Panagariya's growth diagnosis hinges on the much-hyped high-wage skill-intensive information technology sector. Expectedly, the economic picture blurs the stagnant agriculture sector and the restless unskilled labour into the background. Though the current economic thrust has been found wanting to fill the large development gap, Panagariya stays overtly optimistic that market reforms will reach the impoverished masses.

While the author has sketched the country's economic scene with exhaustive research and careful analysis, the structural problems of the economic system have nevertheless been left unaddressed. The recent collapse of the financial markets has aptly demonstrated that not only the economic system cushions itself against such hard times but that it exhausts the rest of us and corrodes the lives of the poor. This scholarly yet readable book should help those who only wish to read half of the story. The other half is out in the open anyway!

India: The Emerging Giant
By Arvind Panagariya, Oxford University Press, Delhi, 514 pages, Rs 595