International Journal of Advance Study and Research Work (2581-5997)/ Volume 4/Issue1/January 2021

Book Review-Reset Regaining India's Economic Legacy

Reviewed by: Dr. Jonardan Koner
Professor and Dean, NICMAR, Pune, India
Email: jonardankoner@nicmar.ac.in

Author Subramanian Swamy

Year 2019
Price ₹595
Pages 216 pages
ISBN 978-93-5333-651-6
Edition First
Publisher Rupa Publications India

The book describes a journey of India from British period to present stage from a macroeconomics perspective. The book deals with
one of the most discussed topics today - India's economic struggles and the way forward. The book aptly describes India's economy
in three stages - Pre-Independence, Post-Independence till liberalization, and Post-Liberalization India. This book is termed as most
comprehensive document detailing the growth and development of Indian economy till date. The book helps to identify focal points
of economic gaps, out of box realistic ideas to fix them and gripping narration covering the landscape of India's economy history of
150 years backed by data analytics at every stage. The author urges India not to miss out knowledge and Innovation revolution of
21st century after missing out industrial revolution of 19 th and globalisation in 20th due to command economy framework.
The book ‘Reset Regaining India's Economic Legacy’ has six chapters and concluding chapter ‘Appendix’. The book provides huge
amount of data showing multi-dimensional economic parameters in various periods to support his arguments but no tabulation is
overpowering, as he also provides lucid and easy explanation. To provide such a bird’s eye view of 150 years in a few pages is in
itself quite remarkable.
In the First Chapter ‘Imperialism Uproots Agriculture’ the author provides an interesting narrative of the extent to which Britain’s
exploitative “Revenue-Extracting Zamindari System” took a toll on India’s peasantry and the agriculture sector as a whole. The
author has studied the Chinese economy closely and written a fair amount on it. He makes frequent and fairly compelling
comparisons of farm output between the pre-independence economic trajectories of China and India. While in 1950, around the time
that the two countries founded their new republics, China had a comfortable food surplus enabling it to finance rapid industrial
growth, India’s two-century-long decline in foodgrain yield left it lacking such a cushion.

The Second Chapter speaks about ‘Industrialization: Missed Opportunities and Unfulfilled Promises’. In this historic narrative he
compares the growth of Chinese economy vis-à-vis Indian economy. He has chosen these two nations as both suffered from
Imperialism. He gives interesting example of how Chinese elite first opposed the railway lines in their country while Indians
welcomed it. So, India had initial advantage in infrastructure. But, even though railways covered most of India well before Chinese,
the British goal was only to exploit the resources by making it easier for primary products to be exported to UK at exploitative prices
while taxing the industrialists and Indian traders very heavily so they were at disadvantage when they used the railways. In a way
this advantage saved India during famines. China had two famines in the period of 1870 to 1950 while India had 12. But, due to
better infrastructure India hardly saw any deaths while Chinese suffered nearly 32 million deaths. He shows how Indian
entrepreneurs did better and produced low cost goods but were dis-incentivised by the British through various levies and various
obstacles.

The Third Chapter expresses view on ‘The Albatross around India’s Economic Neck: The Soviet Model’. It is the second period,
extending for four decades from 1950 that attracts the most trenchant criticism from the author, who makes no bones about his
complete disdain for the socialist ideology that informed the economic policies of the era. Terming the Soviet command economy
model with its focus on planning as ‘The Albatross around India’s Economic Neck’ author is emphatic that it was this flawed policy
approach that caused a “monumental loss of opportunity”.

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 International Journal of Advance Study and Research Work (2581-5997)/ Volume 4/Issue1/January 2021

The Fourth Chapter consists of ‘Roar of the ‘Caged’ Tiger’. The phase Two of Indian economy post 1947 was about imposing
Soviet model of economy in India. This resulted in infamous ‘Nehruvian Rate of Growth’ of around 3.5% wrongly called ‘Hindu
Rate of Growth’ by establishment economists. During this period of 1947 to 1990, Dr. Swamy again brings out a comparison of
India vs other economies with special attention to India vs Chinese economy. China too followed Soviet model during this time, but
completely, unlike India’s mixed economy. Despite huge investments by Soviets, China too couldn’t achieve better results than 4%
growth rate. While Communists realised the futility of their Communist model of development and changed course in 1980, India
took another decade to move out of respectable appearance of government controlled economy run as mixed economy that gave
incentive to be dishonest.

The Fifth Chapter is related to ‘A Tryst with Destiny That Never Materialized’. Dr. Swamy begins the chapter of Indian economy
post 1990 with a quote from The Economist -“Nowhere else, not even in Communist China or the Soviet Union, is the gap between
what might have been achieved and what has been achieved as great as in India.” In this chapter author goes on to explain the factors
behind the complete break from the past with liberalisation and removal of license raj and how India took to a new trajectory that hit
a growth rate of 8%. This is the most absorbing chapter and I wouldn’t like to spoil readers’ interest by quoting from this chapter. It
was an exhilarating period to which many of us are witness while the millennial people have no idea about this journey from
command control economy to a competitive open economy.

Author offers a critique of the Modi since his arrival on the national scene. He feels that bold reforms went missing and shows that
the economy followed more or less the UPA period policies. According to him, the boldest move of demonetisation was marred by
poor planning. Similarly, implementation of the boldest reform, GST, was again messed up by bureaucrats who created complex tax
regime that made life of the people in business and industry, specially the MSME segment, difficult and economy suffered. In both
cases bureaucracy was ill prepared but misguided the political masters with false assurances. Despite denials by government sources,
Dr. Swamy insists that Indian economy is in a downward spiral unless some dynamic actions are undertaken. We may or may not
agree with this doomsday prediction. Considering that he had predicted slowing down of the economy much earlier, one may not
take his warning lightly.

The Sixth Chapter is dedicated to ‘The Modi Years: Looking Back, Loking Ahead’. He insists that PM Modi is a great manager of
micro-economics but he doesn’t understand macro-economic issues or solution. Implementations of wonderful pro-poor schemes by
Shri Narendra Modi following the principles of Integral Humanism show his strength in this area. At macro level, his advisors are
not telling him what is correct but only tell him what he wishes to know. This has resulted in a mess at macro-economic level
according to Dr. Swamy

The Concluding Chapter of book is titled as ‘Appendix: Towards a New Ideology of Integral Humanism’. One of the highlights of
the book - Deendayal Upadyaya's integral humanism is being analysed from economic perspective. He offers 7 postulates using
modern theoretical terminology and jargon which is pure classic piece of work. There are many essays and books on Integral
Humanism, but none of these have provided a working model. Dr. Swamy has done it successfully. This working model deserves a
full-fledged book from Dr. Swamy. If policy makers care to study this appendix, they can get very good idea about major changes
required to make Indian economy a dynamic tool for growth and social upliftment.

About the Author

Dr. Subramanian Swamy is an economist with a PhD from Harvard University, with Nobel Laureate Simon Kuznets and a jointly
published research with Nobel Laureate Paul A. Samuelson. He taught graduate-level courses for several years at Harvard
University after receiving his doctorate. He returned to India to be Professor of Economics at IIT, Delhi, but his scathing criticism of
socialism and communism as being inapplicable in a democracy, invoked the ire of Prime Minister Indira Gandhi and his
professorship was terminated in 1973. However, a Delhi court held the termination as null and void in 1991, but he resigned after
resuming his Chair for a day to participate full-time in politics. Dr. Swamy has been elected six times to the Lok Sabha and the
Rajya Sabha, three times each respectively. As a Cabinet Minister twice in 1990–91 and 1994–96, he helped Prime Minister
Chandra Shekhar and Narasimha Rao to launch economic reforms. He is well versed in law and has successfully argued for a large
number of public interest litigations.

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