BACKSTAGE: The Story behind India’s High Growth Years

2020·1.77 MB·english

by  Montek Singh Ahluwalia

BACKSTAGE

Published by
Rupa Publications India Pvt. Ltd 2020
7/16, Ansari Road, Daryaganj
New Delhi 110002
Copyright © Montek Singh Ahluwalia 2020
The views and opinions expressed in this book are the author’s own and the facts are as reported by
him which have been verified to the extent possible, and the publishers are not in any way liable for
the same.
All rights reserved.
No part of this publication may be reproduced, transmitted, or stored in a retrieval system, in any
form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the
prior permission of the publisher.
ISBN: 978–93–5333-821-3
First impression 2020
10 9 8 7 6 5 4 3 2 1
The moral right of the author has been asserted.
This book is sold subject to the condition that it shall not, by way of trade or otherwise, be lent,
resold, hired out, or otherwise circulated, without the publisher’s prior consent, in any form of
binding or cover other than that in which it is published.
This book is dedicated to Isher,
my life partner and companion
over the past fifty years,
without whose encouragement and
intellectual support
this book would never have been written.
And to our five grandchildren—
Veer, Angad, Arjun, Meher and Mahira.
Theirs is the generation that has the
greatest stake in the India story
continuing to move forward.
CONTENTS
Prologue
Part One
1. My Formative Years
2. Development in Practice
3. Coming Home
Part Two
4. Indira Gandhi Returns to Power
5. Reaching for the 21st Century
6. The Crisis of 1990
Part Three
7. 1991: Seizing the Opportunity
8. The Road to Reforms
9. United Policies, Divided Politics
10. Continuity with Change
11. The IMF Interlude
Part Four
12. The UPA: An Unusual Coalition
13. India Hits Peak Growth under UPA
14. The End of Nuclear Apartheid
15. Inclusive Growth
16. Building Infrastructure through PPPs
17. Winter of Discontent: Allegations of Corruption
18. The Planning Commission: An Inside View
Epilogue
Acknowledgements
PROLOGUE
This book is not a memoir. I was turned off the idea of writing a memoir
after I heard someone refer to them as ‘selfies in book form’. I present this
book to the reader as a travelogue of India’s journey of economic reforms,
in which I had the privilege of being an insider for 30 long years. My own
story is interwoven with the narrative, but the personal experiences are not
the principal focus; they are offered to the reader as an additional insight
into what influenced my decisions and, quite possibly, my biases, as I saw
India’s growth and development story unfold.
In a country with a history of over 3,000 years, there is always a danger
of overestimating the importance of individual events. Nevertheless, I
believe the acceleration of economic growth that occurred in India between
the early 1990s and the late 2000s was of crucial importance. India’s GDP
grew at over 7 per cent per annum in real terms from 1993–94 to 2011–12
and poverty declined from 37 per cent in 2004–05 to 22 per cent in 2011–
12. Only a handful of developing countries have achieved rapid growth of
this order over a prolonged period and none of them were large
democracies. In this sense, India’s accomplishment during this period is
unique in the economic history of developing countries.
Part I of this book is largely personal. It is about my years growing up
in Secunderabad and Delhi in the 1950s and early ’60s, my time at Oxford
in the mid-60s, and the eleven years I spent at the World Bank in
Washington DC as a young development economist. It is during this period
that I met my wife Isher when she was a summer intern at the International
Monetary Fund (IMF) in 1970, studying the impact of the 1966 devaluation
of the rupee on the Indian economy. This is the period when I took the two
most important decisions in my life: to marry Isher in 1971 and, a few years
later, to return home and take up a position as economic advisor in the
Ministry of Finance.