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Reform in the Time of Transition


D. Narasimha Reddy


Edited by Rahul Mukherji
Oxford University Press, New Delhi, 2007, pp. x 460, Rs. 650.00

VOLUME XXXII NUMBER 10 October 2008

The neoliberal economic reforms initiated in 1991 in India sparked a wide ranging debate with one group heralding the change as a beginning of ascendancy of India as an economic superpower, and another, at the opposite extreme, fearing a race to the bottom. The debate did generate extensive analytical writings on economic and, to a limited extent, on political dimensions. But the present volume stands out distinctly as a most comprehensive analytical contribution that brings together the entire spectrum of approaches related to the politics and political economy of the reform process. Besides the introduction that sets the background, the other contributions (14) are grouped into three broad themes viz. (economic reforms as) development strategy (3), the political economy of reforms (4), and economic reforms and the political economy (7). Though most of the papers collected here were published before 2002 in journals and other books, some have been specially commissioned for the volume to enable it to cover the missing aspects and alternative perspectives.   The editor’s introduction serves as an excellent background for what follows in the later contributions on the politics and political economy of reforms. In the years preceding reforms, he discerns three phases. The first phase (1947–68) is seen as being characterized by the public sector occupying the centre stage with import substituting industrialization (ISI) and extensive regulatory systems. During this period, what began as ‘state-private sector compromise’ ends up with public sector domination. There is a succinct, and very well documented, account of the politics behind the process, which is seen essentially as Nehru (state)-Patel (private) or Planning Commission-Birla tussle for supremacy and which, with the death of Patel in the mid-fifties, ends in favour of Nehru. Equally interesting is the narrative on the shift in plan priorities towards agriculture in the late sixties. Though it was essentially an internal decision initiated during the Shastri regime but supported and pursued by Indira Gandhi in later years, external pressures from donors, especially the US, influenced the shift. However, Mukherji’s observation that in the late sixties India lost an opportunity to benefit from global capital that had driven East and South East Asia to rapid development is a moot question. The second phase (1969–73) marked the emergence of state capitalism with the intensification of state regulating and nationalization. But by the mid-seventies (beginning of the third phase) the social forces led by Jayaprakash Narayan, the coming of the Janata government made the ...


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