The monograph- Swadesi Plan (1970) – was presented on the floor of the Indian parliament by Atal Bihari Vajpayee, the then leader of Bharatiya Jana Sangh. The focus of the ‘Swadeshi Plan’ was India specific economic development. The present book under review is the converted form of this monograph.
On reading this book one may notice two striking features. First, in this age of transient beliefs and ideologies, one cannot but admire the author’s conviction and steadfast views that he held on to for almost five decades. Second, in the words of the author himself, the book has “focused not so much on the historical narrative of India’s economic development or the lack of it – but on distilling out the consequences of the economic ideology adopted in different phases in the Indian economy.”
The discussion spans a very long period of 150 years from 1870 to 2019. The book begins with a chapter that provides a detailed description of the economic policies during the British rule. With painstaking detail, the author brings forth the detrimental effect that the British colonial rule had on the Indian economy. He establishes the effects of the British exploitative policies by detailed comparison of data relating to British India and the princely states and also between British India and feudal China during the colonial period.
The subsequent chapters trace the history of Indian planning. Here he emphasises on the detrimental effect of the Soviet economic model and how it prevented India from realising its true potential. He is thus of the view that the Soviet model was “the albatross around India’s Economic Neck”. (p.40)
In order to establish, what Dr. Swamy claims the harm the Soviet model may have done to the Indian economy, he provides comparative data of some countries and that "common history reveals that those countries that adopted the Soviet economic model performed much more poorly than their counterparts.”(p.61)
Also by analysing different economic indicators, he points out that the Indian economy fared much better during the period when it emerged out of the clutches of the Soviet model. It was first during the Janata rule (1977-80) that the growth rate increased from 3.5% to 5%. He goes on to point out how inadequate utilisation of domestic savings prevented India from achieving a higher growth rate unlike Japan and the ‘East Asian Tigers’. This coupled with high tax of taxation, required in an economy with heavy involvement of the government reduced India’s growth rates. In this backdrop, he emphasises that the reforms during the 90s was much needed. He goes on to elaborate that the “five pillars of transformation” on which the Indian economic policy of 1991 rested. These included discarding the Soviet model, modernisation of agriculture, developing inter-nationally competitive industries, efficient allocation of resources and fiscal reforms. The last chapter is highly relevant in the context of the present economic problems in India. Here he provides an incisive analysis of the major shortcomings of the Indian economy under the Modi government. Emphasising the need for skill enhancement in order to reap the demographic dividend, he also recognises the fact that there is no one single model that captures all the different determinants of growth and their interactions. He thus endorses the reliance of the NITI Aayog “upon a number of different models constructed by different research institutions which emphasise different aspects of interaction between growth variables. (p.133)
So far as the economic performance during the 2014-2019 period is concerned, he strongly emphasises the point that the slowdown of the Indian economy and its contributing factors are “all attributable to poor, myopic policy making by amateurs in the Ministry of Finance.”(p.134)
Overall the book portrays the historical development of colonial and post-colonial Indian economy. It provides insights into the ideological issues that underlie the growth of an economic structure. In my view the inter-country comparison provides valuable resources to a serious reader, and contextualises the impact of ideological divides on an economy.
— The reviewer is Assistant Professor of Economics, Tamralipta Mahavidyalaya, Tamluk, West Bengal