Am reading India Unbound by Gurcharan Das. More on the book soon. But there is one particular passage in the book which has me really shaken.
Das says that Lal Bahadur Shastri, India’s Prime Minister after Nehru was the first person to be aware of the pitfalls of the ‘controls’ regime set in motion by his well-intentioned(?) predecessor.
I quote from the book : In the complex, non- monolithic government that India had become, controls were causing delays, waste and enormous harm. He thought it was time to loosen up, and entrusted the task to L.K.Jha, his principal secretary. The Times of India ran a story in the front page in early December 1965 saying the government was contemplating liberalizing some of the less useful controls – it was the first time I came across the word “liberalizationâ€.
Unfortunately, within four months Shastri died and with him all prospects of liberalization. Indira Gandhi was back on the scene, and with a vengeance, with Garibi Hatao. Then followed nationalization of banks and the rest as they say, is history.
Gurcharan Das also says that Rakesh Mohan, the head of the NCAER has conservatively estimated the economic cost of Indira Gandhi’s follies at 1.3 percent lower per capita GDP growth per year. In simpler terms, if those reforms were set into motion around that time, the per-capita GDP would have been atleast 80% higher in 1990 – $550 instead of $300.
Even putting aside depressing thoughts of what we have lost and thinking about what we could have gained is mind-boggling. India would have been an open, liberalized economy for close to forty years now. And if the prosperity of just more than a decade is anything to by….
Anyways, Das’ hope for the future and optimism is infectious….