Book Reviews
Book Review of 'Restart: The Last Chance for The Indian Economy'

How to put India on the growth path


If you want the right solutions, you have to get rid of the myths first. Mihir Sharma, the caustic critic of Indian contemporary social and economic myth-making, spends 80% of his 354-page tome on the Indian economy on this. This book is the single best refutation of all sorts of false economic beliefs we carry in our heads. On that count alone, it’s worth buying and reading the book a few times.
For instance, a lot of people are still quite awestruck that Narasimha Rao, who had spent decades steeped in the idea of Welfare State, suddenly saw light and launched a cut-and-thrust reforms agenda in 1991. According to Mihir, Rao “never had an overarching idea of what he intended to do, or where he intended to go. He just wanted to address a temporary problem, fight a blazing fire… When the fire was out, he stopped caring.”
India took the easy path of devaluing the rupee, allowing imports and removing production controls. Unfortunately, devaluation drove Indian manufacturers to the ground without improving India’s export competitiveness. So, Rao and finance minister Dr Manmohan Singh destroyed the existing Indian manufacturing structure but failed to help build a new one. What should be done? The policy prescriptions are at the end of the book. Mihir has a short, incontestable list:
Labour: Slash ridiculous employment laws but also make generous severance compulsory while expanding social services for labour.
Land: Create a real open market for all land. Also, force companies to buy land from the open market.
Make Private Sector Accountable: We need active institutional investors, better bankruptcy laws and rewards for entrepreneurship and innovation.
Open up the Farm Sector: Repeal land-ceiling laws, allow farmers to write contracts with big purchasers, tax agricultural income. Treat agriculture as any other productive sector.
Reform Cities: Don’t try to keep people out; make them more liveable. Increase the floor space index. 
Higher Tax Revenues: Bring in GST and reform income tax so that more people pay tax and the rich don’t use the many loopholes.
Government Spending: Spend part of the increased taxes on infrastructure, charging people for using it. The private sector has failed to build infrastructure.
The book combines reportage, mood passages, hard numbers and arguments, as well as plenty of contrarian positions—all delivered in an excitable, polemical and conversational tone. I am not sure whether this cocktail would achieve the desired purpose, though. I am not speaking of myself. It was an engaging book to read. I learned a lot I didn’t know about. Lots of parts are a refreshing change from the conventional narrative (like the bit about Narasimha Rao’s ‘belief’ in liberalisation)
The book would be more valuable if the ideas become part of policy-making. This, I am not sure about, not because of the content but the style. Read this passage: “That’s what happens when you pretend you can micro-manage a complex production chain like electricity—and somehow, keep prices down every step of the way. What are we, Superman? I bet even on Krypton they charged full price for electricity. OK, It’s clear that I don’t like coal…”
The sharp edge of the arguments Mihir makes is blunted by this slightly high-strung style. I am not, for a moment, advocating the boring and self-important style of books of this genre. As Mihir says, everybody in India is a bureaucrat no matter which profession they are in. This is why the “prose style of newspapers is usually indistinguishable from that of the average of income-tax reform.” But a more sober style and also the use of some graphics would have done wonders. 
That brings me to the sub-title of the book. It is the same glibness of the main narrative that informs the sub-title. Last chance? We have survived Deve Gowda’s and IK Gujral’s rickety coalitions, Pranab Mukerjee as the finance minister and Sharad Pawar as the defence minister not to speak of Communist Party and Mulayam Singh Yadav and Laloo Prasad in the states. I don’t agree with the centrepiece of this alarmist picture about India: millions of jobs have to created, otherwise we will face certain ruin. Jobs are being created. We don’t have the right ways of measuring them. Whether for low-paying jobs as office boys or entry-level office assistants, jobs are aplenty in all major cities. Anecdotal evidence does not support the thesis of a vast army of jobless and restive youth. That’s a small quibble about the title of an eminently useful book. A must read. 



vijay krishan dashora

12 months ago

at the end of the book review there should be a link to buy it online.

Nifty, Sensex struggling to rally – Thursday closing report
Nifty will weaken below 8,840, while Bank Nifty is already showing signs of weakness
In Wednesday’s closing report, we had mentioned that the uptrend on NSE’s CNX Nifty may weaken, if it closes below 8,820. The 50-share index opened Thursday higher and moved in a range upto 10.20am, after which it started moving sharply lower. However, from 2pm, the benchmarks, Nifty and S&P BSE Sensex started rallying sharply higher. In the next 80 minutes, the Sensex went up by 450 points non-stop. Finally, the indices managed to come back above Wednesday’s close and ended the day marginally higher.
Sensex opened at 29,435 while Nifty opened at 8,883. Sensex moved from the low of 29,108 to the high of 29,523 and closed at 29,462 (up 142 points or 0.48%). Nifty hit a low 8,794 before rising to a high of 8,913 and closed at 8,895 (up 26 points or 0.30%). NSE recorded a volume of 111.64 crore shares. India VIX fell 2.46% to close at 20.3975.
There were reports that the Indian government could consider subsidy for raw sugar exports at a cabinet meeting later in the day.
In a notification issued on Wednesday, the Reserve Bank of India (RBI) said, "Nominated banks are now permitted to import gold on consignment basis. All sale of gold domestically will, however, be against upfront payments. Banks are free to grant gold metal loans". 
Coming back to the stock market, Jindal Steel & Power (25.59%) was the top gainer in ‘A’ group on the BSE. There are reports that the company has won Gare Palma IV/2 and IV/3 blocks in the ongoing coal block e-auctions. The company is reported   to have won the bids at Rs108 per tonne for both the blocks, which have a mining capacity of about 6 mtpa.
Suzlon Energy (6.53%) was the top loser in ‘A’ group on the BSE. The stock was the top gainer of the group on Wednesday following reports that Dilip Shanghvi Family and Associates have made an open offer to buy another 26% stake for Rs2,837 crore in the company.
Sesa Sterlite (6.95%) was the top gainer in Sensex 30 pack. Its subsidiary Bharat Aluminium Company won the Chotia coal block in Chhattisgarh for Rs3,025 per tonne, according to the results of e-Auction for Schedule II coal mines announced by the Ministry of Coal on Tuesday. Wipro (1.36%) was the top loser in the Sensex 30 stock. 
On Wednesday, US indices closed flat with a negative bias. Minutes from the latest Federal Reserve meeting showed that policymakers were concerned that a premature rise in interest rates could hurt US economic growth and recovery in the labour market.
Among the Asian indices, which were trading today, Nikkei 225 rose 0.36,% while NZSE 50 fell 0.26% and SET Composite index of Thailand fell 0.20%.
Japan's exports continued to rebound in January, while imports shrank. Exports for the month grew 17% from a year ago, according to data released Thursday by the Ministry of Finance. Imports decreased 9% as the price tag for inbound shipments of crude oil was dramatically smaller. The trade balance came to a deficit of 1.18 trillion yen, marking the 31st straight month of shortfalls.
European indices were showing mixed trading while US Futures were trading flat.
Greek officials are reportedly planning to submit a proposal to Eurozone finance ministers for breaking the impasse in debt negotiations between the new government in Athens and Greece's European creditors.


Delhi police arrests five for leaking govt documents

According to media reports, some of those arrested by Delhi police have been accused of leaking confidential information to business houses to tweak government's policy decisions


The Crime Branch of Delhi Police has arrested five people, including two officials from the Petroleum Ministry. According to media reports, these people were allegedly trying to get or leak policy documents related with different ministry.
A journalist has been detained and is being interrogated for some classified documents found in his possession, says a report from Times of India.


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