There are eight chapters in this book. The first chapter titled ‘The dollar economy and the rupee economy’ is like an introduction to what this book is about.
Post 1991 reforms, “Differently placed individuals have received varying rewards, for globalised growth does not reward everyone equally. It is especially good for individuals who own globally scarce resources or have a specialised educational qualification. Some in India have become part of an international or ‘dollar economy’, sharing lifestyles and Facebook links with peers in the Western world.
These are not, of course, the only kinds of people who live in India. Others who neither have a specialised education nor own a globally scarce resource are in the ‘rupee economy’, the less affluent part of the country.”
There are different ways to slice what has happened in India since 1991.
The dollar/rupee economy might not be the best, since there are layers within the rupee economy too. That’s also true of the rural/urban lens. There is great heterogeneity within “rural” and a village with a population of 50,000 is different from one with a population of 100.
A survey, done by People Research on India’s Consumer Economy, shows that villages with population of 50,000 have better development indicators than others. As per Census definitions, there are more than 200 “villages” in Delhi. Surely, these are different from a village in a backward district.
Anirudh Krishna recognises this. “Villages in India located closer to towns have benefitted from the country’s economic achievements. In remoter villages, however, the benefits of growth are smaller to detect. Close to 60 per cent of India’s villages are located more than 5 km from the nearest town.
These people’s conditions have not improved much after globalisation.” Stated thus, the proposition is both true and understandable. Development is a dynamic process. If one visualises a radius of development emanating towards the periphery from a centre, as long as that radius becomes longer, one need not worry.
However, there is much more in this well-written book. This is the right place to mention what the author calls the “half-truths” and there are five of these. “(1) Economic growth is what it takes to reduce poverty, and there has been a great deal of progress in poverty reduction. (2) Income or expenditure assessed at a point of time serves as a reliable measure of an individual’s situation. (3) The task of poverty reduction is to move people out of poverty. (4) An individual’s rise above the poverty line represents success in poverty reduction. (5) National poverty-assistance programmes are helping many people overcome poverty.”
What does one do to make things better? “Three principles, however, need to be protected, which are simultaneously valued ends and necessary devices: First—the provision of a minimum living standard for all, adjusted to a country’s changing circumstances; second—an equal chance of upward mobility for everyone’s son or daughter; third—accessible forums for expressing governance concerns and overseeing quality standards in service delivery.”
In terms of documenting disparities in development and the governance challenge, with a ground-up view of the broken ladder, this is a well-written book. But the more important policy question is, what do we do about it? There is nothing wrong with those principles, but they are like motherhood statements. “The national dialogue has to concern itself with providing more resources for developing physical and social infrastructure in rural India. Equally, the dialogue has to focus upon the mechanisms of spending money—who is authorised to spend it, when and for what purposes and with whose consent.” Indeed, and within and without the 14th Finance Commission, however, imperfectly, that’s what the dialogue has been about.
“It is not simply the nature of the policy that matters for development performance. There is a definable quality that some villages have, which others don’t, that is important.” Repairing the steps of the broken ladder works in some places, but not in all. Therefore, one should try to distil out the prerequisites for replication and success, and perhaps also determine what guarantees failure. This book doesn’t answer that question. But we are beginning to get some kind of an answer for households targeted under the Deen Dayal Antyodaya Yojana.
If there is a revised edition of this book, it will probably be even better. Till then, this is a book worth reading.