Pulapre Balakrishnan - Economic Growth in India: History and Prospect

For Sivakami and Balakrishna Menon

who started me off ,

and to the peasants and workers of India

who quickened her economy

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One of the greatest benefits of supervising graduate students is to be able to follow their subsequent careers and see them realize their potential. Pulapre Balakrishnan (Bala) was one of my PhD students at Cambridge in the 1980s. He wrote a fine dissertation on pricing and inflation in India. It was characterized by excellent understanding of the relevant theory, suitable adaption to the Indian case, and sensible use of econometric procedures to test the inferences drawn from the theoretical structure. He exhibited the traits of an excellent all-round economist. In his new book, Economic Growth in India: History and Prospect , all these traits are present in their full maturity.

The book is a comprehensive study of growth in post-Independence India. The theory is both subtle and eclectic, drawing on several strands of the relevant literature, and presented in an original narrative by the author. It uses empirical methods to advantage and in the process of examining the several sensibly-defined historical periods, the author tests whether the conventional wisdom on these stands up to close scrutiny. If it does not, he explains why, and also why his carefully presented narrative is a more convincing explanation. In setting out the history of the various phases of growth, Bala is careful to praise the positive aspects, while pointing out clearly and fairly the deficiencies and shortcomings. Most of all, his humane approach always leads him to evaluate how the less well-off have fared and, if they have not gained from the growth in India, as is often the case, what should be done about it.

While reading Bala's new book, I have also been reading the three volumes of the late A.K. Dasgupta's Collected Works (New Delhi, Oxford University Press, 2009). I was struck by the similarity of their approaches, both in setting out economic theory and applying it. Their findings are explained in clear distinguished prose, bringing out the economic intuition of their analysis while unobtrusively, but clearly, supplying the necessary technical back-up to their results. Bala's book is a major contribution, which is destined to have a proper impact on the profession's understanding of recent Indian economic history and on what may be learned from it.

It is a privilege to write the foreword to this excellent book and to be able to pay a tribute to a former student and a firm friend.

G.C. H ARCOURT

Jesus College

University of Cambridge

This work was fully funded by a Senior Fellowship of the Nehru Memorial Museum and Library (NMML), New Delhi. Therefore, the first and largest part of the gratitude that I would like to express for the support that I have received in completing it goes to this unique national foundation. Its lavish award alone afforded me the leisure so central to such an undertaking. Apart from funding my research, the Library also waived for me its mandatory residence requirement, allowing me to remain at Kozhikode, which has considerably furthered my research and writing. This special dispensation was due to the high-mindedness of K. Jayakumar and N. Balakrishnan, the Acting Director and Deputy Director, respectively, at the time of my assuming the Fellowship in March 2006. The understanding was magnanimously maintained by Mridula Mukherjee who was to take over as the full-time Director a little later. Since for the economist, material outcomes can never be wished away, I am relieved to note that their judgement paid for itself in the form of this book! Subsequently at the NMML, P. Chandramohan, Deepa Bhatnagar, Aruna Tandan, and the staff of the Library and the Administration all facilitated my research in various ways.

A study as wide-ranging as this could not have been accomplished without the assistance of many individuals, and it gives me great pleasure to acknowledge their inputs. Foremost among them are M. Parameswaran and M. Suresh Babu. Parameswaran generously agreed to my use in this book of our joint work and updated the statistical exercises as more data and better methods became available. Suresh Babu read the entire manuscript, suggested how my arguments could be improved, chased up the data needed to support them, and assisted with the graphics. These two young economists exhibit an understanding of the economy and a sense for the right methodology in applied work that far exceed their years in the profession. I have been the beneficiary of these rare capabilities.

Among the persons with whom I have had the privilege of discussing my ideas as they appear here are Bharat Ramaswami, Arunava Sen, Aditya Bhattacharjea, Amitava Bose, Balaram Menon, Venugopal Menon, K. Pushpangadan, E. Sridharan, Rajagopal Natarajan, D.J. Bangara, C. Selvaraj, Jairam Ramesh, Murkoth Ramunni, Ramachandra Guha, Francine Frankel, Ruchira and Ajit Kumar Ghose, Ravi Arvind Palat, V.N. and Ahalya Balasubramanyan, Govinda Rao, S.K. Rao, Abhijit Manik Sen, Ashok Soota, K.P. Sankaran, K. Saradamoni, Arunima Gopinath, Prem Shankar Jha, Majid Siddiqui, Partha Dutta, R. Nagaraj, Mahesh Rangarajan, Dilip Mookherjee, Amrit Tandon, Debraj Ray, Mukesh Eswaran, Sushil Kumar Pillai, K.C. Mohan, Ashok Kotwal, T.N. Srinivasan, Aditya and Mridula Mukherjee, Tirthankar Roy, N.R. Nanda Kishore, Surajit Das, Anit Mukherjee, K.R.S. Murthy, N. Chandramohan, M.P. Chandrashekaran, Sanjaya Baru, Rakesh Mohan, the late Amaresh Bagchi, C.T. Kurien, K.L. Krishna, A.R. Vasavi, Preeti Bahadur, Jayati Ghosh, Tapas Sen, V.R. Panchamukhi, Deb Kusum Das, Abdul Azeez, N.J. Kurien, Peter de Souza, Ram Manohar Reddy, Vijay Shankar, V.K. Natraj, P.V. Shenoy, Rajeswari and Dhruv Raina, Ajit Mozoomdar, Shovan Ray, Prakash Upadhyaya, R. Govinda, Guilherme Vaz, S. Venkitaramanan, Manmohan Agarwal, Gurbachan Singh and Ritesh Jain. All of them have been generous with their time and advice even when they have disagreed with me, at times strongly. Finally, the comments and suggestions of two anonymous referees have improved the argument and the structure of the book. Of course, I remain responsible for the views expressed here.