Books on the Indian economy usually fall into two categories. The first category takes a very positive and gung-ho view and the other paints an excessively bleak and pessimistic picture of the economy.

Though Saurabh Mukherjea and Nandita Rajhansa’s book Behold the Leviathan – The Unusual Rise of Modern India, tries to tread the middle ground, the book takes a bullish view on India’s economic prospect despite not shying away from the pain points -- both social and economic.

The Indian economy’s impressive bounce back from the Covid pandemic has been widely acknowledged both in Indian and abroad. Both foreign investors and multilateral agencies have been praising India’s economic resilience and stability in an uncertain geopolitical global order.

The book, not surprisingly, starts with India’s remarkable rise as an IT global power in the last two decades or so. The role played by Bengaluru in India’s IT story and how it spawned the e-commerce boom and start-up ecosystem is described in some detail. Interestingly, the authors say that India’s rise as a global Chess power mirrors its economic journey.

Though the 1991 reforms is rightly seen as the major inflexion point for the Indian economy, the authors tend to have a rather cliched and reductionist view of the period between 1947-91.

Digital Path

Among the positives, the authors talk about the JAM trinity, the public digital initiatives (Aadhaar, UPI, India stack), Jan Dhan accounts and their impact on the empowerment of the marginalised sections of society, especially women and the “historically oppressed castes”. The role of education for both women and the Dalits has been rightly highlighted.

The greater financialisation of savings by Indian households and the breathless surge of stock markets, which shows no signs of slowing despite warnings of a correction, are seen as key indicators of economic resilience. The authors’ background as fund managers perhaps explains their bullish views on the stock markets.

The authors also briefly touch upon how four Indian leaders and intellectuals of the past – Dadabhai Naoroji, GK Gokhale, MG Ranade and Gandhiji – answered the key questions on economic development of India – free market vs State-led approach, open economy vs autarky, self sufficiency vs comparative advantage, and the nature of public goods’ provision. Their insightful and rather contrasting positions on these issues shaped Indian policy in the post-independence era.

The two most interesting chapters in the book are the ones on the rise of women and the impressive rise on the Peninsular States (the five southern States and Maharashtra).

The authors rightly acknowledge the role played by the digital initiatives (JAM, Aadhaar, Jan Dhan) in the financial empowerment of women. Women have better access to formal credit now and are increasingly seen as more credit- worthy borrowers.

However, the authors explain away the low labour participation rate of women, especially in 15-24 age group, as greater focus on women’s education. Though this argument seems compelling, this is an issue which has sparked a big debate in the country with the jury still being out.

Southern surge

The spectacular rise of the peninsular States has been remarked by several economists and analysts, the most recent being a paper by the PM’s Economic Advisory Council. Both in terms of social and economic development these States have surged ahead.

Among the southern States the authors focus particularly on Tamil Nadu. In contrast to the companies based in Mumbai and in the Delhi-NCR belt, whose revenues exceed Rs 15,000 crore, the companies in Tamil Nadu fall into the ₹100-5000 crore turnover, indicating greater industrial diversity and spatial spread.

Tamil Nadu is also a State where fewer people work in agriculture and more work in industry and services compared to the national average. The same picture emerges in the Gross Value Added metric.

The authors also touch upon another crucial issue – the imminent delimitation exercise. This is likely to increase the number of Lok Sabha seats of the North India. The South Indian States will surely chaff at having to live with lower Parliamentary representation despite contributing half of the country’s tax revenues. The Centre’s handling of this political hot potato will be crucial for the future of Indian polity.

However, the authors have omitted one crucial factor and drove the Southern States’ ascent – the role played by cheap skilled and unskilled labour from the Hindi heartland.

Being fund managers, the authors have had a ringside view of how commercial activity is surging in the Tier II and III cities and how that has spawned a new economic elite in the country. This has also perhaps led a greater social and economic ‘democratisation’ of the country.

The potential of the China+1 strategy, the growth of Global Capability Centres and the key role that the India Stack II will play are brought out by the authors in the later chapters. They also crunch numbers from the I-T department and CMIE and argue that the “fastest profit generators of India are not from among the top 900 companies; instead they are from among the 6,000 companies below the top 900”.

The advance praise for the book, which includes Nandan Nilekani, Mohandas Pai and Niranjan Rajadhyaksha. is gushing. This would normally make a reviewer wary, but the book is an engaging and readable one with plenty of interesting anecdotes mined form the authors’ travels across the country.

This book gives a good snapshot of the Indian economy, for greater depth readers will have to look elsewhere.

Find the book here.

Published on October 6, 2024