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The Indian Economy and its Challenges


Arindam Banerjee

THE OXFORD HANDBOOK OF THE INDIAN ECONOMY IN THE 21ST CENTURY: UNDERSTANDING THE INHERENT DYNAMISM
Edited by Ashima Goyal
Oxford University Press, New Delhi, 2014, pp. 1040, Rs. 2495.00

VOLUME XXXIX NUMBER 6 June 2015

Reconciling growth and development has decidedly been an important challenge for the Indian economy. Scholars have appraised the economic reforms since the nineties in a divergent fashion in the wake of persisting backwardness and increasing inequality. While some have held inadequate reforms as the cause for this underdevelopment despite high economic growth, others have pointed out the skewed nature of economic growth as the reason behind increasing deprivation. No matter which side of the dividing line one is located, it is not possible to comment on the performance of the economy without taking cognizance of the structural poverty that remains conspicuous.  The concerns regarding meeting the development targets have further intensified with economic growth now slowing down after 2010. In a globalized economy, the determinants of growth and development are also wide-ranging and demand a holistic analysis to comprehend the present and future trajectory of the economy. In that context, The Oxford Handbook of The Indian Economy in the 21st Century comes across as a valuable contribution to understanding the multifaceted dynamics of the economy. With 33 articles on varying topics like macro-economics, fiscal and monetary policy, inflation, financial markets, sectoral analysis, trade policy, poverty, social sector and infrastructure organized in eight sections, the book attempts to cover as many dimensions of the economy as possible. The wide coverage also makes it a useful resource for teaching graduate and postgraduate students. Nonetheless, the book is not without its share of conflicting analyses and prescriptions for the Indian economy. This is not unwelcome, given the particularly complex issues and the debates that exist with regard to policies and objectives to be pursued. Enhancing the richness of the analyses, even while allowing for disagreements, is more prudent than making straitjacketed policy suggestions, which work for neither the economy nor the people. With regard to the perspectives of economic thought, nearly all articles adhere to the neo-classical frame of analyses, relying heavily on the efficiency of markets. Market failures are discussed largely as a subsidiary phenomenon or a special case within the economy. This somewhat cuts into the richness of analysis primarily as large sections of the population in the country are unable to access markets on equal terms. In this regard, some of the articles in the section ‘Inclusion, Equality and Opportunities’, stand out in the book. The dichotomy between supply-side and demand-side constraints on the economy is apparent from the articles that discuss ...


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