India@100: Envisioning tomorrow’s economic powerhouse
Krishnamurthy Subramanian
Rupa Publications
Rs.995 Pages 520
In this well-argued compendium, the author presents his four pillars plan to attain the 2047 Viksit Bharat and $30 trillion GDP plus goals
It’s surprising that this seminal growth and development ideas-packed book authored by Krishnamurthy Subramanian, former Chief Economic Advisor (2018-21) of the Union government, hasn’t generated much media and academic attention. Subramanian served as CEA during the pandemic when there was every possibility of the economy sinking because a panicky government ordered the most prolonged shut-down worldwide of business, industry and commerce — and particularly of education institutions.
That the economy didn’t sink completely was because of Subramanian’s sage advice that instead of providing universal unemployment and consumption subsidies, GoI should invest constructively in building infrastructure to ensure quick bounce-back after the pandemic. Fortunately, the BJP-led NDA government at the Centre heeded his advice and the Indian economy has quickly recovered its growth momentum.
Similar good advice is provided to government and the public to sustain India’s 7 percent plus GDP growth momentum until 2047, the centenary year when the country will celebrate its independence from almost 200 years of exploitative British rule. That era of darkness transformed the subcontinent from the world’s wealthiest region accounting for 20 percent of global output to one of the poorest with per capita GDP of $2,485 (cf. America’s $80,035).
Refreshingly, Subramanian entertains little doubt that if India “redoubles its commitment to the sound economic policies implemented in the last (past) decade, aiming for annual growth of 8 percent, India @100 could potentially achieve a $55 trillion economy” based on compounded growth calculus after allowing for rupee depreciation and inflation.
To sustain and improve the current annual rate of economic growth to 8 percent per year, drawing on the examples of post-1978 China’s ‘Four Modernisations’ (agriculture, industry, defence and science) strategic development plan; Japan’s post World War-II resurrection plan resting on four pillars ((industrial policy, education, infrastructure, export-led growth) and post WW II Germany’s four pillars plan (competitive market economy, strong welfare state, labour reforms and fiscal rectitude), in this well-argued compendium, Subramanian presents his four pillars plan to ensure that India grows its economy at 8 percent per year to attain Prime Minister Modi’s Viksit Bharat and $30 trillion GDP centenary year goals. Indeed, Subramanian believes that if his development strategy is implemented, the PM’s $30 trillion GDP goal by 2047 will prove too modest.
The first pillar proposed by the author is “laser-like” focus on macro-economic growth. In the short run this will result in extreme wealth inequality — the bug-bear of Paris-based economist Thomas Piketty and left-liberals in India — admits Subramanian.
But in a 73-page section (which also highlights the importance of judicial reform) calling for prioritizing growth over distribution, the author insists that “given India’s stage of development she must continue to focus on economic growth to lift the poor out of poverty by expanding the overall pie,” rebutting the left-liberal argument for prioritizing redistributive justice.
Nevertheless under his second pillar, presented in Section 3 which runs over 90 pages, Subramanian proposes empowerment and upward mobility of the poor through employment and “good jobs to transform lives”. In particular, one sentence in the prologue to this section sums it up: “Employment lies at the heart of inclusive growth, serving as a conduit for economic empowerment and social mobility… large sections of the commentariat still paint entrepreneurs and businessmen with the broad brush of ‘necessary evil’. It is important to dispel such notions and recognize that entrepreneurs and businessmen contribute tremendously to society by creating meaningful jobs.”
Of course meaningful employment and good jobs for all necessitates a robust education system, and the author addresses this seemingly intractable issue of post-independence India in the very last chapter of this solutions-rich book titled ‘Knowledge catalyst: empowering India’s human capital through education’. Here he makes a seminal suggestion that instead of trying to attract the best talent into K-12 education, a more practical solution would be to improve the teacher training process, so that even mediocre graduates transform into good teachers. A must-read chapter for all educators.
Subramanian’s third pillar for underpinning national development is titled ‘Ethical Wealth Creation’ which makes a clarion call for Adam Smith’s “invisible hand of markets” to be “wedded to the hand of ethics”. This chapter is essentially an unambiguous call for reawakening the country’s ancient tradition of free markets and free enterprise, which until British imperialism and Nehruvian neta-babu socialism laid us low, had transformed the Indian subcontinent into the world’s most verdant and prosperous patch of earth.
For this devoutly to be wished consummation, Subramanian’s wish-list includes minimising government interference in business, creative destruction of zombie business enterprises, wealth creation by empowering instead of rubbishing entrepreneurs, boosting innovation and privatization of public sector enterprises, most of whom are in the red and require frequent budgetary bailouts. A perfect prescription.
This clear-minded economist’s fourth pillar of national development is a reinforcement of the third titled ‘Virtuous Cycle Ignited by Private Investment’ in which he reiterates that private investment and free enterprise are the primary drivers of consumption, jobs and growth. To fuel private investment, a strong financial sector is necessary as is an efficient education system to develop India’s huge and high-potential human resource.
Subramanian’s four pillars of national development need to be accorded deep consideration by all right-thinking citizens. For too long, the development debate has been clouded by woke leftists and closet commies enamoured of bankrupt communist ideology less out of conviction than personal advancement and aggrandizement objectives. 21st century India’s most empowering and too-long buried resource, is its native spirit of free enterprise, and self-learning capabilities of its population.
This volume — despite its intimidating number of charts, graphs and calculi — is a timely reminder that developed nation status and a $55 trillion economy by 2047 is not mission impossible. If the neta-babu brotherhood which has proved that it cannot lead or follow, at very least, gets out of the way.
Dilip Thakore
