The tipping point

Written by Ashwani Kumar | Updated: Oct 19 2014, 06:13am hrs
Pocket books are often meant to be polemical or ready-reckoners, but sometimes they do wonders with their discursive power of authoritative knowledge. The pocket book under review may legitimately escape your attention at the first instance, but if you care to open a page, be careful; you will be consumed by the elegance of a Balzacs novella-like narrative that stands out for its conceptual innovation, theoretical richness, empirical rigour and magisterial style and substance. In this elegant forensic analysis of the extraordinarily puzzling and bizarre experience of fasting and feasting India, Rahul Mukherji, a political scientist of formidable repute at National University of Singapore, has packed in almost an epic tale of why and how anodyne economic reforms happened and how dirigisme was toppled in 1991 without any ritual blood sacrifice or chaos, and how the Divided Leviathan turned into a vibrant federal market economy around iconisation of reform-minded chief-ministers in the states of India since 1991.

Rarely has any scholar argued forcefully and persuasively that reforms are not only a tryst with La Dolce Vita (sweet life) but also a realisation of citizenship rights for cohorts of the post-midnight children generation. And this requires not only slaying the ghosts of Nehruvian socialism, but also reinventing a new Nietzschean superhero. Therefore, I can sympathise with you if your secular worries are silenced by the dedication of the book to Swami Vivekananda, who understood the interconnectedness of growth and well-being, and, above all, the critical importance of global interdependence and religious harmony.

And, believe me, its no simple coincidence that intellectual restitution of long-forgotten Swami and regime change in the Lutyens corridors almost coincided. You may call it magical realism or telepathic power of the analyst in the book!

Liberals, radicals, and post-modernists in centres of south Asian studies may endlessly debate on whether India continues to be a historic novelty or nothing short of a miracle or a leap of faith, but Rahul Mukherji tackles a deeply perplexing and also lingering puzzle in the literature on political economy about whether or not a poor democracy can become an economic miracle and also ensure how the last shall be first in accessing goodies of growth and welfare.

No doubt, the violent demolition of Babri Masjid and the tragic self-immolations of the anti-Mandal movement seeded and shielded elite politics of economic reforms, but there is unanimity among scholars that Indias rupture with socialistic society of command economy avoided predictable bloodbath of cataclysmic proportions between winners and losers in the economic reforms.

Though the spectacular 8.5% growth rate between 2003 and 2007 has dipped lower than 5% in the recent past, India is still considered one of the fastest growing economies in the world after China. If rising neo-middle classes have tasted indiscriminate opulence and embraced unapologetically German philosopher Gottfried Leibnizs adage that we live in the best of all possible worlds, India continues to remain a proverbial land of paradoxes where poor rural women wait behind closed doors to fall on the salaries of their returning migrant husbands, like wildcats on a slab of flesh, so evocatively captured by Aravind Adiga in his Booker winning novel White Tiger. In a reminder of the authors own self- reflexivity on Karl Polyanis notion of social rights, Rahul Mukherji creatively embeds economic growth in the landmark citizenship rights to development, such as Mahatma Gandhi Employment Guarantee Act (MGNREGA), Right to Education Act and Right to Information Act in an increasingly chaotic democracy. He also cracks the puzzle of why MGNREGA worked in Andhra Pradesh, but failed in poverty basket states like Bihar.

Given the gradual decline in the predictive power of state or society-centered perspectives such as reforms by stealth, or dominant proprietary classes thesis or identity politics, Rahul Mukherji debunks the popular but cliched arguments of so-called balance of payment crisis and alleged conspiracy of the IMF-World Bank in unleashing reforms and fostering economic globalisation in India. Instead, acknowledging the continuing influence of powerful economic pressure groups or oppositional class interests in shaping the outcomes of growth and welfare, he invokes a unique tipping point model of ideational change from 1975 till 1990 that rendered deregulation and globalisation to policy makers in the Parliament and economic bureaucracy in India. Provocatively and insightfully, Rahul Mukherji presents enactment of rights-based welfare programmes as a case of how an ideational tipping point was reached as a result of slow-moving, but effective civic action and social movements rather than top-down bureaucratic reforms. Combining disparate strands of historical institutionalism and discursive institutionalism to emphasise the substantial changes in policy ideas in the government and the technocracy, the tipping-point refers to the gradual change of views/ideas emerging out of the small interspersed shocks, moving the system closer to

the saddle point with every shock, as and when it comes, resulting into large-scale transformation for predominately endogenous reasons.

Thus, Indias rupture with the Nehruvian model of command economy that had gradually degenerated into a rent-seeking corrupt toffee-model of economy, was made possible by the ideational transformation of the technocratic policy elite who exploited the opportunity of balance of payment of crisis to pursue reforms that reversed the perverse path-dependencies of the import-substitution model and helped them deal with the powerful industrial class largely opposed to significant globalisation and deregulation.

In analysing the role of entrepreneurial chief ministers such as Chandrababu Naidu, SM Krishna and Narendra Modi, and skilled technocrats like Montek Singh Ahluwalia, Shankar Acharya, Rakesh Mohan and Vijay Kelkar, led by former prime minister Manmohan Singh in his earlier avatar of finance minister, the tipping-point ideational model lends credence to the thesis that Indias reforms for growth and welfare are largely home-grown!

That economic ideas held by dominant sections of the technocracy and the ideas that captured the imagination of powerful leaders mattered the most in the narrative of economic reforms since 1991 must comfort the hearts of policy makers in the Narendra Modi government to complete the unfinished agenda of economic reforms. Some of the shortcomings of the book are quite predictable. It strangely omits the analysis of why reforms lacked popular support among the voting public. It fails to respond to Vivek Chibbers pioneering class analysis of failure of developmental bourgeois and is also silent on governmental practices in the banking sector, especially how Reserve Bank of India contributed to the tipping-point transformation.

Interestingly, the book champions the cause of rule-based regulatory systems but shows no awareness of Jeane Tiroles path-breaking works on regulating emergent two-sided markets in India. Part of the reason why many places in India appear dysfunctional is that even when ideational change occurs, stealthily or overtly, society often reflexively re-embraces the old orthodoxy.

I remember often sneaking to the Wheeler Book Store at the railway platform in the city of Deheri-on-Sone or Dehri-Dalmianagaronce a vibrant industrial city and now a forlorn ghost town in Biharto burnish my childhood fantasies in the sputtering of coal engine trains stopping haltingly and leaving us like Hindu rate of growth in a huff. Now, I am growing old in post-reform India and day dreaming of a trip there in a mythical bullet train in the pursuit of Swach-Bharat and make-in-India happiness!

Ashwani Kumar is the author of Community Warriors and professor and chairperson at Centre for Public Policy, Habitat and Human Development, Tata Institute of Social Sciences, Mumbai

Political Economy of Reforms in India

Rahul Mukherji

Oxford

Rs 275

Pp 200