There was Jathar and Beri and then there was Datt and Sundaram. You can determine the generation to which a student of the Indian economy belonged by checking out which of these two books he had read. Entire batches of the Indian Administrative Service can be dated by which one of these books the examinee memorised to enter the civil services. But if you have been an undergraduate studying the Indian economy only in the past couple of decades, then the chances are that these four men may have been worsted by one woman—Uma Kapila.
To be fair, Kapila’s edited volume, Indian Economy Since Independence, Academic Foundation, now into its silver jubilee edition, is a collection of essays on various aspects of the Indian economy written by well-known professional economists. On the other hand, Ganesh Bhaskar Jathar and Shridhar Govind Beri’s Indian Economics, first published in the 1930s and went into several editions, was a textbook on the Indian economy. Its publication followed the success of Vera Anstey’s Economic Development of India, first published in 1929.
Ruddar Datt and KPM Sundaram’s Indian Economy, now in its 70th edition (being updated by those who have taken over the brand), is more of an undergraduate textbook. Kapila’s collection of essays is different, though its purpose is similar—to introduce the basic structure of the Indian economy to a young student of the discipline through the words of experts, mainly economic policy-makers.
Kapila’s list of contributing authors reads like a who’s who of Indian economic policy-makers—from Manmohan Singh, BS Minhas, A Vaidyanathan, C Rangarajan and Bimal Jalan to Vijay Kelkar, Montek Ahluwalia, Arvind Panagariya and Bibek Debroy. Kapila has also paraded on her pages eminent academic economists including ML Dantwala, Pravin Visaria, N Krishnaji, Suresh Tendulkar and KL Krishna, to name a few, of her several dozen contributors. Kapila’s first edition, published in 1988, carried a foreword by the doyen of Indian economists, the builder of the Delhi School of Economics, VKRV Rao.
In the decade before Kapila began putting her book together, a joke among students of economics was that nations that produced professionally successful economists were not the economically successful ones. In the first decade of its existence, in the 1970s, most Nobel Prizes went to economists from countries like the UK, the Netherlands and even Russia, while the most successful economies of that decade were Germany and Japan. No Japanese economist, and certainly no Chinese, has ever received a Nobel in economics! So, the joke ran, India has great economists (one even got a Nobel!) but the economy is a mess. Q.E.D.
What Kapila’s book shows is the richness of the analysis of the Indian economy that an undergraduate student is privileged to be exposed to. It then begs the question as to why the economy has still not taken off. To be sure, the long-term story is a positive one. For three decades, from 1950 to 1980, national income grew at an annual rate of 3.5% (after half a century of near-zero growth between 1900 and 1950). Then, for two decades, from 1980 to 2000, the economy grew at 5.5% per year, and since the beginning of this century the average annual rate of growth has been close to 7.5%. Though the last three years may well pull that average down.
This rising trajectory of growth places India among the better-performing developing economy. However, given the low level of income from where independent India started and given the skewed nature of the growth process, these numbers have not always translated into a sustained improvement in the livelihood of most Indians. Kapila’s volume includes essays that record both the upside and the downside of the Indian growth story.
Kapila was for years a teacher of economics at Delhi University’s Miranda House. She published the first few editions on her own, being an enterprising college teacher trying to put together a set of readings for her students. What is interesting about Kapila’s book saga is that from the modest efforts of a college teacher, an entire publishing house has emerged! Her sons Rituraj and Sanu are the proud owners of Academic Foundation, a successful and highly regarded Indian publishing firm that specialises in economics and the social sciences, and has also been publishing for international organisations.
Kapila’s 25th volume rightly ends with an emphasis on the importance of investment in human capabilities for a country of young people. If India has to translate its demographic advantage into sustained high growth and an improvement in the quality of life of its people, then the country must educate its people and invest in their skills. The basics matter more.
The author is director for Geo-Economics and Strategy at the International Institute of Strategic Studies
