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Book Review | With a new government in place, leading economists seek the way ahead

What The Economy Needs Now manages to gather India's most pressing development issues in a single volume, some of which is explained in great detail, which creates a sense of urgency for the mammoth task ahead.

May 31, 2019 / 10:10 AM IST

The din and dust of elections have settled down, a new Cabinet has been sworn in and news publications are flush with opinion pieces on what the government must focus on to propel, or simply preserve India’s growth.

What The Economy Needs Now published ahead of the elections also had a similar objective. The book is a compendium compiled by the country’s leading economists summarising India’s most pertinent development issues, and likely solutions.

Experts have done a commendable job of keeping their papers and notes free from jargon, making it accessible to the lay reader. A well-informed citizen would have been aware of the development challenges through its scattered coverage. From education to healthcare to the macroeconomy, What The Economy Needs Now has managed to gather all issues in a single volume, some explained in great detail, creating a sense of urgency on the mammoth task ahead.

On reading What The Economy Needs Now, one also realises the interconnected nature of these challenges. As pointed out by a paper by Neelkanth Mishra, the more India gets developed, the more it moves from consuming less dense fuel such as firewood to denser fuel like crude oil. Catering to that demand would require increasing imports, which would leave our economy vulnerable to the volatility of crude oil price shocks. In a related paper by Sajjid Chinoy, he said one way to minimize this vulnerability would be to come up with, “Institutions that allow companies and the government to hedge against changes in oil prices.”

According to former RBI governor Raghuram Rajan, one of the many steps needed to resolve the issue of non-performing assets (NPAs) that has plagued the banking sector would be to restart projects that have been stalled, many of which have may have been stopped over a lack of regulatory approvals, of land or permissions, or input supply. Attempts at addressing many of these deficiencies have been made in other chapters of What The Economy Needs Now, but one wonders about the far-reaching effects of such de-regulation on other aspects such as the environment, whose issues are also covered in a chapter.

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Reading the many solutions provided by the economists in What The Economy Needs Now, I found myself at times impressed, hopeful, and at times skeptical, even cynical of their effectiveness as they appeared to be either too simplistic or would work only in theory. Institutions, made up of people, are imperfect and prone to corruption. The government, made of elected representatives, would like to stay in power, and likely back short-term initiatives and policies whose results are only visible towards the end of an election cycle. But it is clear from the way the experts have compiled this slim volume that it is not meant to be an answer to all of India’s problems.

As stated in the introduction, “We hope this non-partisan analysis of our situation, while not intended to be comprehensive, will help spur debate as India moves to elections.”

Any policy would require the political will to follow it through. In an age of information overload, and a massive country like India which holds a myriad of priorities, world views and opinions, channelising this will to address priority areas becomes a task of vital importance.

Keeping this in mind, What The Economy Needs Now seems to hit the mark. In a democracy, it is through debate that a consensus on our priorities can be reached at. And What The Economy Needs Now makes for an appropriate diving board to jump into this task.
Siddhesh Raut
first published: May 31, 2019 10:10 am

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