Partial View of Outcome of Reforms and Gujarat 'Model'

Jagdish Bhagwati and Arvind Panagariya have written extensively on the economics of India in recent decades. Yet they have written this book because, according to them, at this stage of political and economic development in India there is a need to have a comprehensive look at the accomplishments and failures of the economy. There is also a need “to refute unwarranted and unsupported populist myths prevailing about the economy”, and to understand and address the next set of challenges so as to move ahead with faster and more inclusive growth.

The authors observe that the Nehruvian economic policies in the early days of planning in the 1950s followed the goals mentioned in Jawaharlal Nehru’s famous “Tryst with Destiny” speech. However, since the mid-1960s, under the leadership of Indira Gandhi, Indian policymakers shifted to socialism without any real convictions and created an environment of controls and populist poverty alleviation programmes, which neither delivered growth nor poverty reduction. Since the mid-1980s and particularly after 1991 the Indian economy has taken a turn for the better. The past two decades of reforms have raised growth and contributed to poverty reduction. There is a temporary decline and a kind of policy paralysis at present; however, there is a need to move ahead with the reforms to achieve faster and inclusive growth. To move to the right path there is a need to refute some unfounded myths, which are basically about the economic policies in India till the mid-1960s. There are also misconceptions regarding the achievements of economic reforms, mainly in terms of poverty reduction, improvements in health and education, the prevailing inequalities in the economy, the conditionality imposed on India by the International Monetary Fund-World Bank (IMF-WB); and linking corruption, suicides, and the like to reforms. Part 1 of the book is devoted to refuting these myths.