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| All you need to know about the economy | | BOOK REVIEW |
| Suveen K Sinha / Apr 07, 2010, 00:46 IST |
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Tata Motors has been the toast of Indian industry for launching Indica, the country’s first indigenously developed passenger car, and then Nano, the world’s cheapest. But this is well known. What is not is that in the earlier decades the group’s attempts to enter the car segment were twice thwarted by the government. The first time it wanted to tie up with Daimler Benz and the second time with Honda. In the 1960s and 1970s, the group’s plans did not find favour with a socialist-minded government uncomfortable with Big Business. Along with the attempts to make cars, the group was also prevented from entering aluminium, paper and fertilisers. As you read this, you pick up not only the facts — illuminating as they are — but also begin to hear the unspoken: Perhaps a tinge of regret over lost opportunity. That’s because you have already read what is written in the parentheses a few paragraphs earlier. “The late Mr J R D Tata… became Group chairman in 1938 (and continued till 1991 when I succeeded him).” The realisation comes rushing in that this piece on the House of Tatas is written by none other than Ratan N Tata, who has continued as its chairman since the succession he has referred to. Therein lies the secret to the success of The Concise Oxford Companion to Economics in India.
Even the most evolved of moviegoers would confess to having a soft corner for some actors. At some point, they would have seen a film purely because its star cast was irresistible. Someone may have gone to Cat on a Hot Tin Roof because the lure of Paul Newman paired with Elizabeth Taylor was irresistible. Various others would have been similarly tempted by A Few Good Men (Jack Nicholson, Tom Cruise, Demi Moore) or maybe, in recent years, by Ocean’s Eleven (George Clooney, Brad Pitt, Julia Roberts).
The constellation of writers this book has brought together is similarly compelling, if not more. Living up to its name, it is concise all right! But it manages to pack a punch even in the limited space allotted to all the vital topics because it has chosen the most suitable writers for each topic. What they bring to the book is unerring insight, eye-opening detail, and many takeaways — all packed tightly in little capsules.
There is also a fine sense of balance. Most writers, told to write on the Ambanis, would be tempted to go overboard. Starting from Dhirubhai’s early days as a fuel station attendant in Yemen, they would be more than likely to gush over the vast business empire built by him and made bigger by his sons. T N Ninan, who retired as the editor of this newspaper on January 1 and continues as the chairman of the Board and editorial director, does that, too, but does not stop there. Writing delicately, he makes it a point to talk about the things other than business that the Ambanis are known for. So, in the space of a mere two pages, you read about the admiration as well as the criticism that has come the Ambanis’ way, their business acumen and their lobbying prowess, the success of the big projects and the relative failure of the telecom foray under Mukesh Ambani, the allegations as well as the fact that most of them were never proved.
To give you some more glimpses, there is Amartya Sen on Democracy and Social Welfare, which, along with a few other chapters, forms the starters menu to the main course of this book. Sen has done a crisp analysis of the relationship between democracy and development. The assessment of development, he says, cannot be divorced from the lives that people can lead and the real freedoms that they enjoy. Development can scarcely be seen merely in terms of enhancement of inanimate objects of convenience, such as a rise in the gross national product or industrialisation. Their value must depend on what they do to the lives and freedoms of the people involved, which must be central to the idea of development.
None other than Y V Reddy, former Reserve Bank of India Governor, writes on monetary policy. As expected, he does a systematic job, dividing the chapter into subheads (accounts, shall we say?). He signs off by underlining the major challenge currently faced. Conduct of monetary policy, he says, is complex even in the best of times, since it has to be forward looking and based on current and sometimes inadequate data relative to rapid changes. Additional complexities arise in the case of an emerging market like India. In an environment of increasing capital flows, narrowing interest rate differentials and surplus liquidation conditions, exchange rate movement tends to have strong linkages with interest rate movements and poses the challenge of an integrated view on interest rate and exchange rate developments for monetary management.
There are many other stars who have written various parts of this book. But a great star cast alone is seldom sufficient. Thankfully, the director’s baton here is being wielded by hands that more than match the writers’. Kausik Basu, chief economic adviser to the finance ministry, who used to teach at Cornell University has teamed up with Annemie Maertens, also of Cornell, to edit the book.
THE CONCISE OXFORD COMPANION TO ECONOMICS IN INDIA
Edited by Kaushik Basu & Annemie Maertens
Oxford University Press
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