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Breaking the Mould: Reimagining India's Economic Future
Where is India going today? Is it surging forward, having just overtaken the United Kingdom to become the fifth-largest economy in the world? Or is it flailing, unable to provide jobs for the millions joining the labour force? What should India do to secure a better future? India is at a crossroads today. Its growth rate, while respectable relative to other large countries, is too low for the jobs our youth need. Intense competition in low-skilled manufacturing, increasing protectionism globally and growing automation make the situation still more difficult. Divisive majoritarianism does not help. India broke away from the standard development path—from agriculture to low-skilled manufacturing, then high-skilled manufacturing and, finally, services—a long time back by leapfrogging the intermediate steps. Rather than attempting to revert to development paths that may not be feasible any more, we must embark on a truly Indian path. In this book, the authors explain how we can accelerate economic development by investing in our people’s human capital, expanding opportunities in high-skilled services and manufacturing centred on innovative new products, and making India a ferment of ideas and creativity. India’s democratic traditions will support this path, helped further by governance reforms, including strengthening our democratic institutions and greater decentralization. The authors offer praise where the Indian establishment has been successful but are clear-eyed in pointing out its weaknesses. They urge India to break free from the shackles of the past and look to the possibilities of the future. Written with unusual candour, and packed with vivid examples and persuasive arguments, this is a book for anyone who has a stake in India’s future.
351 pages, Kindle Edition
Published December 7, 2023
208 people are currently reading
1286 people want to read
About the author
Raghuram G. Rajan
34 books765 followersRaghuram Govind Rajan is a world-class Indian economist who has also served as the twenty-third Governor of the Reserve Bank of India. He also serves as Eric J. Gleacher Distinguished Service Professor of Finance at the Booth School of Business at the University of Chicago. Rajan is also a visiting professor for the World Bank, Federal Reserve Board, and Swedish Parliamentary Commission. He formerly served as the president of the American Finance Association and was the chief economist of the International Monetary Fund (IMF).
In 1985, he graduated from the IIT, Delhi with a bachelor's degree in electrical engineering, and he completed his MBA at the IIM, Ahmedabad in 1987. He received a PhD in management from the Massachusetts Institute of Technology (MIT) in 1991 for his thesis titled "Essays on Banking".
In 1985, he graduated from the IIT, Delhi with a bachelor's degree in electrical engineering, and he completed his MBA at the IIM, Ahmedabad in 1987. He received a PhD in management from the Massachusetts Institute of Technology (MIT) in 1991 for his thesis titled "Essays on Banking".
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Displaying 1 - 30 of 76 reviews
October 20, 2024
In this excellent book Ragu Rajan and Rohit Lamba argue that India should and can grow faster than it has recently, envisioning a future in higher value-added services for domestic consumption and export (including services bundled with manufacturing goods). Their prescription has many parts but the ones they emphasize most are political tolerance and openness (needed for creativity and ideas to fuel this type of economy), more political decentralization (so the state can be more responsive), and investments in people (especially education and health).
On the "what not to do" side is industrial policy which they are on the (quietly and politely) scathing side, offering the example of a $2b subsidy to offset 70% of the cost of a Micron that will support 5,000 jobs--at a cost of $400,000 per job. Moreover they point out it is still a foreign plant, India does not have big national security vulnerabilities around chips (and even it did getting part of the supply chain wouldn't help much), and this type of near-commodity manufacturing is at the lowest end of the value chain.
I would feel more confident about Rajan and Lamba's vision for the future of India if they could point to other examples. But there aren't any--thus the title Breaking the Mold. In addition, I'm worried that service sector productivity growth has generally been lower than manufacturing productivity growth around the world--another obstacle to the vision. Also India already has done a lot in services exports (from call centers to back-office legal work) but it has yet to be transformational in aggregate).
All that said, they do have a compelling set of reasons to be skeptical about industrialization as a future for India because there is too much low-wage competition globally, the type of manufacturing they would do is low value added (at the bottom of Richard Baldwin's "smile curve"), the existence of technological and other change that has led to premature deindustrialization (country's manufacturing employment share peaks at lower incomes), and the West is unlikely to tolerate another China-like shock. These arguments are compelling, thus the importance of offering another vision. And to be clear, I'm not saying I'm confident their vision is wrong, just nervous.
Fortunately, you don't need to be convinced by their vision to be convinced by their prescription for the future. They are NOT saying the service sector should be targeted and subsidized because they can confidently predict winners and losers--which basically is what much of the industrialization policy vision is based on. Instead they are talking about the types of preconditions for greater innovation, investment, entrepreneurship, participation in the workforce, etc., that would help advance just about any path--including industrialization if they end up having been too pessimistic about that.
And one more note: the book has a nice discussion of why China grew and India did not. Rajan and Lamba list a lot of causes but emphasize the following (some of which I've read elsewhere but worked nicely as a compare/contrast to their interpretation of India): (1) China had more primary education/literacy which was originally to train people to follow Communism but then when they liberalized enabled them to start small businesses and have higher productivity (this reminds me of some of the arguments that both Jews and Protestants have done well economically at various times because the reading they developed for another reason became useful economically when circumstances changes), (2) competition between localities in China made it more business friendly and growth oriented than India's highly nationalist system and (3) China could use wage suppression, financial suppression, devalued exchange rate and general lack of democracy to push through large scale infrastructure and industrialization in a way a democracy could not do.
On the "what not to do" side is industrial policy which they are on the (quietly and politely) scathing side, offering the example of a $2b subsidy to offset 70% of the cost of a Micron that will support 5,000 jobs--at a cost of $400,000 per job. Moreover they point out it is still a foreign plant, India does not have big national security vulnerabilities around chips (and even it did getting part of the supply chain wouldn't help much), and this type of near-commodity manufacturing is at the lowest end of the value chain.
I would feel more confident about Rajan and Lamba's vision for the future of India if they could point to other examples. But there aren't any--thus the title Breaking the Mold. In addition, I'm worried that service sector productivity growth has generally been lower than manufacturing productivity growth around the world--another obstacle to the vision. Also India already has done a lot in services exports (from call centers to back-office legal work) but it has yet to be transformational in aggregate).
All that said, they do have a compelling set of reasons to be skeptical about industrialization as a future for India because there is too much low-wage competition globally, the type of manufacturing they would do is low value added (at the bottom of Richard Baldwin's "smile curve"), the existence of technological and other change that has led to premature deindustrialization (country's manufacturing employment share peaks at lower incomes), and the West is unlikely to tolerate another China-like shock. These arguments are compelling, thus the importance of offering another vision. And to be clear, I'm not saying I'm confident their vision is wrong, just nervous.
Fortunately, you don't need to be convinced by their vision to be convinced by their prescription for the future. They are NOT saying the service sector should be targeted and subsidized because they can confidently predict winners and losers--which basically is what much of the industrialization policy vision is based on. Instead they are talking about the types of preconditions for greater innovation, investment, entrepreneurship, participation in the workforce, etc., that would help advance just about any path--including industrialization if they end up having been too pessimistic about that.
And one more note: the book has a nice discussion of why China grew and India did not. Rajan and Lamba list a lot of causes but emphasize the following (some of which I've read elsewhere but worked nicely as a compare/contrast to their interpretation of India): (1) China had more primary education/literacy which was originally to train people to follow Communism but then when they liberalized enabled them to start small businesses and have higher productivity (this reminds me of some of the arguments that both Jews and Protestants have done well economically at various times because the reading they developed for another reason became useful economically when circumstances changes), (2) competition between localities in China made it more business friendly and growth oriented than India's highly nationalist system and (3) China could use wage suppression, financial suppression, devalued exchange rate and general lack of democracy to push through large scale infrastructure and industrialization in a way a democracy could not do.
December 22, 2023
Well written, good flow and structure to the book. You may or may not agree with the conclusions but there are multiple independent suggestions backed by clear arguments. You can break them apart on your own and decide.
May 11, 2024
I excitedly bought this book after having watched an interview/discussion that Rajan had at the ISB in Hyderabad. I agreed with his fundamental point that for India's economic growth to be optimised, we need to focus on human capital, science and technology. However, before watching this discussion, I had never realised that manufacturing cannot benefit us today in the same way that it could have 20 years ago. I could finally put two and two together as to why people had been saying we had missed the reforms bus. This lightbulb moment, and excitement at learning more about Rajan and co's proposed solutions led me to buy this book.
Imagine my disappointment then, to see pretty much the same arguments repeated in the book as I heard in the interview, without further elaboration or too many more examples. The appetizer of this core argument was followed by a boring, never-ending main course of policy recommendations on everything from health and education to democratic reforms, climate change (?), soft power, hard power and whatnot. Most of this was not really revolutionary, and seemed hurriedly put together mainly as a criticism of the current government, rather than a detailed exploration of how India could become an economic superpower mainly on the strength of intellectual brawn and human capital. I felt the authors could have spent the meat of the book on exploring these themes, rather than putting together a laundry list of reforms that India requires.
For example, the authors could have presented a detailed study of how silicon valley developed in collaboration with nearby University towns, thus bolstering their arguments with a real life example.
Or they could have looked at the economic rise of Japan, driven by the growth of homegrown giants like Sony, Honda and Toyota (as opposed to China which grew a lot by manufacturing for Western companies). Did these companies benefit from Japanese investment in human capital, science and fundamental research? The reader is not any wiser on this topic having read the book.
I was also hoping for many more case studies of emerging Indian companies and start-ups. But what examples were listed were quickly rushed through (including a silly one on Banarasi saris of all things, as if we can build a massive economy on the back of saris and laddoos), and they were not nearly enough for my liking. Such examples abound in our news - Indians have been growing saffron in container ships, building self-driving tractors, using biomass power plants to power agricultural cold storage, etc. Why limit oneself to India in this regard - other countries could have been explored as well.
The authors argue that we cannot compete with China or even Vietnam despite low wages, because of our equally low productivity. But this claim is not extensively backed up by data or numbers (I am not disputing the claim, but data would still have been good to look at to understand the sheer scale of problem).
The authors argue that entering the semiconductor chip space is "ruinous" at this stage, but they themselves present the case of Morris Chang, who was poached from Texas Instruments by Taiwan to create TSMC, leaving the user wondering why India cannot do something similar (I am not suggesting that we know with certainty if the current government's initiative to boost semiconductor tech will work - I am merely asking for a more detailed discussion. The book, for example, did not even go into what size of transistors our current chips use, what other countries can currently produce, and how soon we could bridge the gap)
The authors argue against crony capitalism, but spend no time discussing the grip that Chaebols have on the Korean economy (again, I am not arguing in favour of cronyism, but the facts are worth exploring, for reasons both purely academic as well to inform policy decisions).
The authors rightly point out that Indian workers lack skills, but make no effort in listing what such skills might be (particularly in blue collar work, about which most of us are quite clueless). AI is quickly dismissed out of hand as unreliable (as if the technology could never improve) and the much more frightening spectre of humanoid robots is completely ignored.
The authors make a case of political decentralisation, but again, fail to back it up with examples - can we compare urban governance in cities with and without strong mayoral governments? Are there examples within India of rural governance working better when decentralised? How does China build better cities than India despite its autocracy?
Most irritating of all was the vague and unconvincing argument that democracy and lack of authoritarianism are somehow linked to better economic outcomes, creativity and scientific progress. This argument completely ignores cases like Korea, Taiwan, Japan Singapore, Nazi Germany and the Soviet Union. Nor was there any discussion on the authoritarianism we sometimes see in democracies, such as America during the anti-communist campaign following the second world war.
Of course, I am not advocating for a dictatorship or more authoritarianism, but arguments against dictatorship must be honest ones.
There was also a rather condescending, imagined discussion with an imagined BJP fan at the end of the book, for reasons I could not understand. It felt rather silly - the imagined BJP fan was so easily convinced by the authors' arguments - in reality we all know how endless political arguments are! I really failed to see the point of this section of the book.
All in all, this book felt like a missed opportunity to educate readers like me on the core argument of the authors. I felt I learnt much more from the interview I mentioned at the start of the review. Rajan is clearly making it a political ploy, positioning himself as the next Manmohan Singh, in case the INDIA alliance wins by some miracle (or for whenever Modi retired or dies). His participation in Rahul Gandhi's yatra seems to indicate as much. This is rather sad, as he claims to be a neutral academic.
I wish the authors had focussed on the core ideas instead of meandering all over the place and turning a promising India into a boring and annoying mish mash of tangential and unrelated topics.
Imagine my disappointment then, to see pretty much the same arguments repeated in the book as I heard in the interview, without further elaboration or too many more examples. The appetizer of this core argument was followed by a boring, never-ending main course of policy recommendations on everything from health and education to democratic reforms, climate change (?), soft power, hard power and whatnot. Most of this was not really revolutionary, and seemed hurriedly put together mainly as a criticism of the current government, rather than a detailed exploration of how India could become an economic superpower mainly on the strength of intellectual brawn and human capital. I felt the authors could have spent the meat of the book on exploring these themes, rather than putting together a laundry list of reforms that India requires.
For example, the authors could have presented a detailed study of how silicon valley developed in collaboration with nearby University towns, thus bolstering their arguments with a real life example.
Or they could have looked at the economic rise of Japan, driven by the growth of homegrown giants like Sony, Honda and Toyota (as opposed to China which grew a lot by manufacturing for Western companies). Did these companies benefit from Japanese investment in human capital, science and fundamental research? The reader is not any wiser on this topic having read the book.
I was also hoping for many more case studies of emerging Indian companies and start-ups. But what examples were listed were quickly rushed through (including a silly one on Banarasi saris of all things, as if we can build a massive economy on the back of saris and laddoos), and they were not nearly enough for my liking. Such examples abound in our news - Indians have been growing saffron in container ships, building self-driving tractors, using biomass power plants to power agricultural cold storage, etc. Why limit oneself to India in this regard - other countries could have been explored as well.
The authors argue that we cannot compete with China or even Vietnam despite low wages, because of our equally low productivity. But this claim is not extensively backed up by data or numbers (I am not disputing the claim, but data would still have been good to look at to understand the sheer scale of problem).
The authors argue that entering the semiconductor chip space is "ruinous" at this stage, but they themselves present the case of Morris Chang, who was poached from Texas Instruments by Taiwan to create TSMC, leaving the user wondering why India cannot do something similar (I am not suggesting that we know with certainty if the current government's initiative to boost semiconductor tech will work - I am merely asking for a more detailed discussion. The book, for example, did not even go into what size of transistors our current chips use, what other countries can currently produce, and how soon we could bridge the gap)
The authors argue against crony capitalism, but spend no time discussing the grip that Chaebols have on the Korean economy (again, I am not arguing in favour of cronyism, but the facts are worth exploring, for reasons both purely academic as well to inform policy decisions).
The authors rightly point out that Indian workers lack skills, but make no effort in listing what such skills might be (particularly in blue collar work, about which most of us are quite clueless). AI is quickly dismissed out of hand as unreliable (as if the technology could never improve) and the much more frightening spectre of humanoid robots is completely ignored.
The authors make a case of political decentralisation, but again, fail to back it up with examples - can we compare urban governance in cities with and without strong mayoral governments? Are there examples within India of rural governance working better when decentralised? How does China build better cities than India despite its autocracy?
Most irritating of all was the vague and unconvincing argument that democracy and lack of authoritarianism are somehow linked to better economic outcomes, creativity and scientific progress. This argument completely ignores cases like Korea, Taiwan, Japan Singapore, Nazi Germany and the Soviet Union. Nor was there any discussion on the authoritarianism we sometimes see in democracies, such as America during the anti-communist campaign following the second world war.
Of course, I am not advocating for a dictatorship or more authoritarianism, but arguments against dictatorship must be honest ones.
There was also a rather condescending, imagined discussion with an imagined BJP fan at the end of the book, for reasons I could not understand. It felt rather silly - the imagined BJP fan was so easily convinced by the authors' arguments - in reality we all know how endless political arguments are! I really failed to see the point of this section of the book.
All in all, this book felt like a missed opportunity to educate readers like me on the core argument of the authors. I felt I learnt much more from the interview I mentioned at the start of the review. Rajan is clearly making it a political ploy, positioning himself as the next Manmohan Singh, in case the INDIA alliance wins by some miracle (or for whenever Modi retired or dies). His participation in Rahul Gandhi's yatra seems to indicate as much. This is rather sad, as he claims to be a neutral academic.
I wish the authors had focussed on the core ideas instead of meandering all over the place and turning a promising India into a boring and annoying mish mash of tangential and unrelated topics.
This entire review has been hidden because of spoilers.
December 8, 2024
2.5/5. A lot of grandstanding and cliches. Very little original insight or out of the box thinking.
June 5, 2024
One of the most sensible books!
February 2, 2024
If there was a book that gauged India's strengths and weakness in the most neutral sense and spoke of how to take India from good to great, this is it. From a political angle, the book addresses the optimists and pessimists of India's trajectory and goes on to evaluate argument from both sides.
As I read this book, I felt like India was being described like that one kid in class, whose parents are told by the teacher that they have a lot of potential but they're not matching said potential.
For example, why just settle on acquiring a seat at UNSC, let's create organizations that deal with resolving Climate Crisis through World Climate Authority and the resultant migrant crisis through a Global Migration Organization.
Let's author the regulations around AI, around regulations for services that enable us to provide services like legal, medical, etc. and prevent protectionism in services industry where only the domestically qualified can compete. We shouldn't just fight to become the next China i.e. the next manufacturing hub of the world but find ways to add even more value to the supply chain than just assembling the products. Basically, we need to dream bigger, because we can achieve them.
There are ideas about education, jobs, healthcare, manufacturing vs services, dealing with the upcoming climate related challenges & the impact of AI on jobs. There are suggestions on how the country can become a superpower not just on economic metrics like GDP or Per Capita Income but a superpower in the social and cultural sense, provided "India does the hard work, is willing to embrace innovative paths, and resists premature triumphalism and divisive politics."
The authors suggest that the reader take pride in the progress the nation has made, but cautions that we shouldn't get carried away and celebrate early. They advise that we shouldn't claim/pretend to have arrived when there is still a lot of work to be done and lot of challenges coming ahead that the Nation needs to be prepared to face, such as the rise of AI and impact on jobs, climate change, to name a few. We shouldn't settle for good, or what we've achieved, and aim higher. I think by the end of the book, both pessimists and optimists will be brought in the middle to become cautiously optimistic with a clear thought process and plenty of great ideas on how we can do better as an economy, society, and democracy.
A fantastic read, not too big, and written in plain English so you don't need any background in economics to pick this up. It's written for the masses and I hope it's read by many. Highly recommend this one - 5/5⭐
As I read this book, I felt like India was being described like that one kid in class, whose parents are told by the teacher that they have a lot of potential but they're not matching said potential.
For example, why just settle on acquiring a seat at UNSC, let's create organizations that deal with resolving Climate Crisis through World Climate Authority and the resultant migrant crisis through a Global Migration Organization.
Let's author the regulations around AI, around regulations for services that enable us to provide services like legal, medical, etc. and prevent protectionism in services industry where only the domestically qualified can compete. We shouldn't just fight to become the next China i.e. the next manufacturing hub of the world but find ways to add even more value to the supply chain than just assembling the products. Basically, we need to dream bigger, because we can achieve them.
There are ideas about education, jobs, healthcare, manufacturing vs services, dealing with the upcoming climate related challenges & the impact of AI on jobs. There are suggestions on how the country can become a superpower not just on economic metrics like GDP or Per Capita Income but a superpower in the social and cultural sense, provided "India does the hard work, is willing to embrace innovative paths, and resists premature triumphalism and divisive politics."
The authors suggest that the reader take pride in the progress the nation has made, but cautions that we shouldn't get carried away and celebrate early. They advise that we shouldn't claim/pretend to have arrived when there is still a lot of work to be done and lot of challenges coming ahead that the Nation needs to be prepared to face, such as the rise of AI and impact on jobs, climate change, to name a few. We shouldn't settle for good, or what we've achieved, and aim higher. I think by the end of the book, both pessimists and optimists will be brought in the middle to become cautiously optimistic with a clear thought process and plenty of great ideas on how we can do better as an economy, society, and democracy.
A fantastic read, not too big, and written in plain English so you don't need any background in economics to pick this up. It's written for the masses and I hope it's read by many. Highly recommend this one - 5/5⭐
May 9, 2024
I was initially intimidated by both the author's credentials but surprisingly this book is accessible to experts and layman readers (like me) alike. The authors eschew jargon and technical language, making complex economic concepts easily understandable to a broader audience. This accessibility, coupled with the book's compelling arguments and real-world examples, makes it a must-read for anyone interested in understanding India's economic trajectory.
I feel this is a significant book (and came at an apt time) for every Indian to read and understand what are the real issues around us and how government policies are formed to solve these problems. What sets this book apart is its forward-thinking approach. Rather than dwelling on past shortcomings, Rajan and Lamba focus on charting a path forward, offering innovative policy prescriptions aimed at unlocking India's full potential. From harnessing the power of technology to fostering entrepreneurship and innovation, the book presents a compelling vision for India's economic future.
Highly recommended.
I feel this is a significant book (and came at an apt time) for every Indian to read and understand what are the real issues around us and how government policies are formed to solve these problems. What sets this book apart is its forward-thinking approach. Rather than dwelling on past shortcomings, Rajan and Lamba focus on charting a path forward, offering innovative policy prescriptions aimed at unlocking India's full potential. From harnessing the power of technology to fostering entrepreneurship and innovation, the book presents a compelling vision for India's economic future.
Highly recommended.
January 28, 2024
A seminal work in understanding what went wrong and what may go wrong and how to correct the course of action for the development in the country of my birth, India. This book is written by the former Reserve Bank of India (RBI) Governor, Raghuram G. Rajan and Rohit Lamba. The work contains so much information, facts, and reasons for my country still being counted in the ‘Global South’. For example, the book informs that in 1961, India’s income per person was $86, South Korea’s was $ 94, and China’s was $ 76. In the present day it’s around $ 2300, while that of China and South Korea is around $ 12,500 and $ 35,000. This fact baffled me and blew my mind! The authors list reasons that why we despite being a cheap labor economy have not been able to compete with our neighbor, China when it comes to manufacturing (and other sectors too). As they say, the early bird takes the worm! This has precisely happened with our story; we were late risers or realizers. We did not educate our youth until it became necessary to cater to the demands of the economy, while China laid emphasis in getting every person being educated and then training them to absorb in the economy. There are several reasons for India being lagging in education and one of them is India being a hierarchical society riddled by the caste system.
The authors have emphasized that India needs a culture of Innovations and Creativity to strengthen its service-based industry in the economy and to develop its services that are coupled with the manufacturing. They have listed and thoroughly explained the drivers that may foster overall growth of the economy of the country and one of them being a vibrant ‘Democracy’. If the country wants to progress then we need more women participation in the workforce, more innovations and entrepreneurial endeavors. For such things we need critical thinking and asking questions not only from the current dispensations but also in every walk of life. Critical thinking comes from adequate education (not only higher education) that inculcates thinking and from adequate nutrition, which abets faculties in the growing kids to think. The authors of the book have made a strong case for vocational education which is abysmal in India. They even suggested it as a paper in the competitive exams! Great!
I particularly enjoyed Chapter 13: The Wrong Way. They have answered some questions in this that may arise if you read this book, which I highly recommend. They explained how the use of the ubiquitous mobile and internet have sent the present youth in trance and have been helpful in deviating its mind from the real issues.
I recommend this book to whoever wants to see the country being proclaimed as Vishwa Guru by others and not by ourselves! I give it 5 stars.
The authors have emphasized that India needs a culture of Innovations and Creativity to strengthen its service-based industry in the economy and to develop its services that are coupled with the manufacturing. They have listed and thoroughly explained the drivers that may foster overall growth of the economy of the country and one of them being a vibrant ‘Democracy’. If the country wants to progress then we need more women participation in the workforce, more innovations and entrepreneurial endeavors. For such things we need critical thinking and asking questions not only from the current dispensations but also in every walk of life. Critical thinking comes from adequate education (not only higher education) that inculcates thinking and from adequate nutrition, which abets faculties in the growing kids to think. The authors of the book have made a strong case for vocational education which is abysmal in India. They even suggested it as a paper in the competitive exams! Great!
I particularly enjoyed Chapter 13: The Wrong Way. They have answered some questions in this that may arise if you read this book, which I highly recommend. They explained how the use of the ubiquitous mobile and internet have sent the present youth in trance and have been helpful in deviating its mind from the real issues.
I recommend this book to whoever wants to see the country being proclaimed as Vishwa Guru by others and not by ourselves! I give it 5 stars.
July 14, 2024
This is the fifth book I've read from Raghuram Rajan. In "Saving Capitalism from the Capitalists," Rajan explored the information asymmetry in credit lines wherein cronies sideline a major stake in lending, leading to unequal financial democracy. In his work "I Do What I Do," he shed light on the challenges faced by Indian banks with sticky loans and non-performing assets, discussing the actions he had taken during his tenure. In "The Third Pillar," he highlighted the importance of “proximate communities” and the threats posed by populists and Marxists against globalization. In "Faultlines," he explained the unresolved cracks in financial systems, such as easy credit that could potentially disrupt the global economy in the future. In this book, he pitches the idea of replacing industrial development with “service-based entrepreneurship” as a remedy for jobless growth in India.
Except for certain southern states and Maharashtra, the rest of India missed the industrial production bus and faced liberalization unprepared. By the time the rest of India tried to catch up, hidden inadequacies started propping up in terms of neglected primary education, poor public healthcare, food insecurity, community malnutrition, and low higher education enrollment. Despite denying that they had missed this bus, the rest of India is attempting to catch up with industrial development, but in all the wrong ways.
Firstly, under the current Production Linked Incentive (PLI) scheme, companies are incentivized based on their incremental sales of manufactured goods over a specified base year. The “layered export,” i.e., assembling goods and exporting them back, imposes high costs via subsidies. For example, the iPhone is "assembled" (though many Indians think India is “manufacturing” iPhones) in a regional plant, with the processor and motherboard coming from China (import #1), the screen from the US (import #2), the battery from Korea (import #3). While it gets assembled and exported (export #1), it returns (import #4) as a finished piece after installing the OS, camera, packing, etc. While the Government of India subsidizes this “assembling” at 6% (from citizens’ tax money), around 4% of the expenses incurred go to import duties. The manufacturing companies benefiting from this arrangement find the incentive too good to establish their assembling units in India.
Secondly, the quality of jobs produced by these manufacturing units is extremely sub-standard. Our youths are not researching user interfaces (UI) or discovering newly improved lithium-ion batteries in these assembling units; rather, they are deployed to perform menial tasks. This is why a minister from a state in India recently questioned the rationale behind subsidizing Rs 3000 crores for creating 50 jobs in such an assembling unit.
Thirdly, India is aware that she is being manipulated by the West in this arrangement of 'near-shoring' and 'friend-shoring' because the West wants a "China + 1 policy", slowly shifting its manufacturing units from China to friendly countries with cheaper labor costs.
Finally, it is well-known that only small and medium enterprises can create jobs and have sustainable growth in the long term. However, even our internal policy decisions are not in favor of manufacturing. For example, the introduction of GST paved the way for the slow death of manufacturing hubs in Tirupur, with jobs moving away to Bangladesh and Vietnam.
The “smile curve value chain” consists of R&D, branding, design, manufacturing, distribution, marketing, sales, and services. Instead of striving to be a part of the global manufacturing hub, Rajan argues that it is time for India to focus on the rest of the value chain to participate in and reap the benefits of globalization. This can be achieved in several ways:
Research & Development: The success story of India lies in generic medicine, where the patented process can be modified to yield a final product similar in composition. India needs to further liberalize patent laws to fully tap into the potential of generic medicines. We can also apply similar copycat models for exporting in other domains such as food processing and chemicals.
Distribution: We can facilitate the establishment of more Global Capability Centers (GCC) by multinational corporations to perform a range of strategic functions such as design, marketing, innovation, and shipping. For these companies, there is an element of cost arbitrage and access to a talented workforce in India.
Services: India can optimally rely on its service sector, such as Information Technology, tourism, media & entertainment, and education. For instance, states should allow doctors, pharmacists, physiotherapists, etc. to participate in global ventures involved in telemedicine. Similarly, students, graduates, and teachers should have the liberty to join global ventures based on online tutoring programs.
In summary, borrowing the “capabilities approach” from Amartya Sen, Rajan argues that by increasing the capabilities of people in terms of education, nutrition, and healthcare and building a skilled human resource, India can still be part of globalization without relying too heavily on industrialization.
Except for certain southern states and Maharashtra, the rest of India missed the industrial production bus and faced liberalization unprepared. By the time the rest of India tried to catch up, hidden inadequacies started propping up in terms of neglected primary education, poor public healthcare, food insecurity, community malnutrition, and low higher education enrollment. Despite denying that they had missed this bus, the rest of India is attempting to catch up with industrial development, but in all the wrong ways.
Firstly, under the current Production Linked Incentive (PLI) scheme, companies are incentivized based on their incremental sales of manufactured goods over a specified base year. The “layered export,” i.e., assembling goods and exporting them back, imposes high costs via subsidies. For example, the iPhone is "assembled" (though many Indians think India is “manufacturing” iPhones) in a regional plant, with the processor and motherboard coming from China (import #1), the screen from the US (import #2), the battery from Korea (import #3). While it gets assembled and exported (export #1), it returns (import #4) as a finished piece after installing the OS, camera, packing, etc. While the Government of India subsidizes this “assembling” at 6% (from citizens’ tax money), around 4% of the expenses incurred go to import duties. The manufacturing companies benefiting from this arrangement find the incentive too good to establish their assembling units in India.
Secondly, the quality of jobs produced by these manufacturing units is extremely sub-standard. Our youths are not researching user interfaces (UI) or discovering newly improved lithium-ion batteries in these assembling units; rather, they are deployed to perform menial tasks. This is why a minister from a state in India recently questioned the rationale behind subsidizing Rs 3000 crores for creating 50 jobs in such an assembling unit.
Thirdly, India is aware that she is being manipulated by the West in this arrangement of 'near-shoring' and 'friend-shoring' because the West wants a "China + 1 policy", slowly shifting its manufacturing units from China to friendly countries with cheaper labor costs.
Finally, it is well-known that only small and medium enterprises can create jobs and have sustainable growth in the long term. However, even our internal policy decisions are not in favor of manufacturing. For example, the introduction of GST paved the way for the slow death of manufacturing hubs in Tirupur, with jobs moving away to Bangladesh and Vietnam.
The “smile curve value chain” consists of R&D, branding, design, manufacturing, distribution, marketing, sales, and services. Instead of striving to be a part of the global manufacturing hub, Rajan argues that it is time for India to focus on the rest of the value chain to participate in and reap the benefits of globalization. This can be achieved in several ways:
Research & Development: The success story of India lies in generic medicine, where the patented process can be modified to yield a final product similar in composition. India needs to further liberalize patent laws to fully tap into the potential of generic medicines. We can also apply similar copycat models for exporting in other domains such as food processing and chemicals.
Distribution: We can facilitate the establishment of more Global Capability Centers (GCC) by multinational corporations to perform a range of strategic functions such as design, marketing, innovation, and shipping. For these companies, there is an element of cost arbitrage and access to a talented workforce in India.
Services: India can optimally rely on its service sector, such as Information Technology, tourism, media & entertainment, and education. For instance, states should allow doctors, pharmacists, physiotherapists, etc. to participate in global ventures involved in telemedicine. Similarly, students, graduates, and teachers should have the liberty to join global ventures based on online tutoring programs.
In summary, borrowing the “capabilities approach” from Amartya Sen, Rajan argues that by increasing the capabilities of people in terms of education, nutrition, and healthcare and building a skilled human resource, India can still be part of globalization without relying too heavily on industrialization.
June 2, 2024
Breaking the Mould: Reimagining India’s Economic Future offers the current major economic condition of India and highlights problems it faces. It has only very recently joined the league of the five largest economies of the world and yet it appears to lack the capacity to create sufficient employment opportunities for its ever expanding population, particularly the youth, one problem that hits home hard for me. It raises questions like competition in the manufacture of low skill, goods for values, protectionism worldwide and, increasing application of robotics in industries to argue against norms of architectural growth path. The authors focus an India strategy that is, for the most part, defined by three main characteristics.
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First of all, the communication emphasizes on such factors as education and improved health standards as well. Second, the book argues on the need to amplify the ‘weight’ of knowledge-intensity services and manufacturing for skill-intensity goods while placing the light on the business prospects of the narrative. Several successful examples from such sectors are described below which point out the trend of the economical welfare.
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Thirdly, Rajan and Lamba observed that there is a need for more governance reforms and decentralizations that would keep the economic support anchored and strengthen situations, which are conducive for economic activity and invention.
No technical terms have used such that anyone can read, discuss, and all general to gain knowledge on this. It is, therefore, a powerful read because not only does it give India credit for all it has accomplished but also educates the reader about areas that should not have been executed and grey areas that were missed.
.
Through writing the book, the authors have effectively laid out the details of the proposals they have put forward, which provides a straightforward, unambiguous prognosis of the possibilities of future growth in India! Not being a reader of this genre at all, I was quite engaged and understood it well!
.
First of all, the communication emphasizes on such factors as education and improved health standards as well. Second, the book argues on the need to amplify the ‘weight’ of knowledge-intensity services and manufacturing for skill-intensity goods while placing the light on the business prospects of the narrative. Several successful examples from such sectors are described below which point out the trend of the economical welfare.
.
Thirdly, Rajan and Lamba observed that there is a need for more governance reforms and decentralizations that would keep the economic support anchored and strengthen situations, which are conducive for economic activity and invention.
No technical terms have used such that anyone can read, discuss, and all general to gain knowledge on this. It is, therefore, a powerful read because not only does it give India credit for all it has accomplished but also educates the reader about areas that should not have been executed and grey areas that were missed.
.
Through writing the book, the authors have effectively laid out the details of the proposals they have put forward, which provides a straightforward, unambiguous prognosis of the possibilities of future growth in India! Not being a reader of this genre at all, I was quite engaged and understood it well!
January 7, 2025
The book was quite enjoyable until 3/4ths of the way. I learned new facts about the history of development of economy in India and our Asian neighbors. I liked the concept of a smile curve in the supply chain world. The authors clearly establish the main theme of the book: Manufacturing does boost the economy, but only to a certain extent. If we want India to be at the forefront of development, we need to invest more in R&D and human capital.
It felt like the authors ran out of interesting things to say after a point because the book started to feel like something you hear and read around you all the time. Its intentions are noble, but the writing felt slightly labored.
Still, I’d recommend this book if you’re keen to know more about the efforts India is taking and needs to take in order to gradually become a world leader.
It felt like the authors ran out of interesting things to say after a point because the book started to feel like something you hear and read around you all the time. Its intentions are noble, but the writing felt slightly labored.
Still, I’d recommend this book if you’re keen to know more about the efforts India is taking and needs to take in order to gradually become a world leader.
April 1, 2025
*India must break free from the shackles of the past not to mimic others, but to forge a path that is uniquely its own.*
Loved every bit of this powerful read! cuts through the noise with bold clarity, offering a fresh take on India’s economic future. a must-read for anyone who cares about truth and progress especially in a time where history and economics are shaped by WhatsApp.
Loved every bit of this powerful read! cuts through the noise with bold clarity, offering a fresh take on India’s economic future. a must-read for anyone who cares about truth and progress especially in a time where history and economics are shaped by WhatsApp.
July 30, 2024
Highly recommend, the thesis is very convincing - need for an increased focus on high value service exports - and the writing is super clear and non jargony.
June 7, 2024
A good gauge of where India stands today in terms of its economy, population, political system, governance structure and engagements with rest of the world. A must read.
Read
August 4, 2024Disappointing!
November 23, 2024
A must read for budding policy makers. Intentionally kept simple, serves as a good reminder of what our dinner table or chai-tapri conversations ought to be focused on.
February 10, 2024
Guys, there aren't enough words to express the gratitude I feel for the moment when I decided to order this book and read it through. It has to be one of the greatest books that I have ever read. I completed it only in 18 days but I want to assure you guys that the speed was not driven by lack of density of content but by the sheer interest and quality of it. Reimagining India's Economic future is a topic which may lead some people to believe that the topics covered must be esoteric and concepts must be difficult to comprehend and understand. However, I must salute both the authors at their effort to make the content so palatable that any layman shall be able able to understand the issues which even the most skilled find it difficult to perceive
I am going to divide the review point wise so that it remains easy for us to understand each issue and the best concept/example that caught my eye and helped me to understand it better.
1) How countries get rich? Simply by producing more economic output per person. What is economic output in this context? It depends upon what are you bringing to the table through your own unique contribution to the market. If you are a farmer, it can be food grains, if you are a builder then through construction, if you are a software engineer then through the services you are providing or through the code you are making, if you are a doctor then through providing medical services, lawyer through legal services etc. So in order to be rich, India needs to create an ecosystem which fosters skilling of its people with work which is valuable in the market and attracting the PhD talent from abroad to come and teach Indians along with getting involved in creation of cutting edge technology as well. We don't even have to look for foreigner PhDs to attract. All we have to do is produce a conducive enough environment and our diaspora would want to come back
2) Why has India not been able to build a global manufacturing presence? The first and foremost reason for that is that India failed to invest in education of masses as it should've in the first few decades of our independence. China overtook us by a massive margin in educating its masses. It can be seen from the fact that in 1950, average years of education in India was 1 while China was at 1.8. By 1980s, China reached 5.7 and India was at 2.5. Even after the reforms of 1990s, India has only managed to creep up at 3.6. The second reason is that even though Chinese government is seen as a centralized authoritarian edifice, its local government has got enormous freedom to attract foreign investors and business. Since the basic capital acquisition in any big manufacturing business is land, that falls within the purview of local government and mayors in Chinese local governments compete to get the business. Its a race of "who can provide the most conducive environment for fostering business?". In India, only the central government, and to some state governments, seems to be interested in bringing business. Local government in India is so fund starved that they can't even bring basic facilities into their jurisdiction forget about competing with each other for business. No one is claiming that Chinese government doesn't resort to corruption. They do but it acts as a lubricant to quicken the process, not as the prime motivator to undertake the activity itself. China focused in fostering its manufacturing industry to create an exporting behemoth. It went about it by keeping its exchange rates artificially low as well. What was a consequence of it? Since labor laws were virtually non-existent and Chinese government controlled all the labour unions, at the cost of average household prosperity, they created a cheap labor market where companies would want to build factories. Due to these issues, it is sometimes argued that India became a democracy too early. India has a first-world civil society but not the first-world governance capacity, resources, education or skill to address its concerns more creatively. Korea was an autocratic nation and it only became a full democracy when it got richer than US and UK. Other reasons why India failed to become a manufacturing hub consists of tariffs and labor regulations. Tariffs have come down from 125% in 1991 to 13% in 2014. Labor regulations in India become more onerous as a firm increases in size as taxation is based on scale and productivity which incentivizes the firms to remain small. Furthermore, workers becoming permanent by virtue of working for a significant period of time encourages the companies to keep most of them on contracts.
3) Punjab is a great example of premature de-industrialization. In the 60s, green revolution enabled it to become both bread basket and rice bowl of our nation. It happened because many factors such as dams like Bhakra Nangal dam and canals came together to provide perennial supply of water. Punjab agricultural university initiated by Punjab CM Mr. Pratap Singh Kairon helped to bring leading edge research on seeds and farming practices. Agricultural credit was ramped up. Government grain procurement at MSP virtually made grain production risk free. Farmer wealth increased which led to a mini industrial revolution as manufacturing of hydraulic motors, sewing machines, auto parts, textiles, bicycle started coming up. Hero cycles is the biggest success story of that mini industrialization as it became the largest bicycle producer in India by 1975. Around 90s, Punjab was the richest state in terms of per capita income but today it doesn't even feature in top 15. What happened? Circumstances changed. India liberalized, tariffs reduced, global competition came into picture, not being in a central location, not being close to a port, being close to a volatile neighbor, all these translated into high freight and insurance costs. Second, the support that was provided to rice and wheat cultivation in 60s continued which didn't give any incentive to farmers to graduate from agriculture to small manufacturing. The support worsened as free power was given to farmers to draw groundwater. All these freebies increased the cost for industry as the money to the government had to come from somewhere which led to business houses setting their shop somewhere else like Hero's headquarters shifted to Haryana. Furthermore, policy benefits to farmers over such a long period of time increased the political bargaining powers of these beneficiaries. So, they didn't let the government let go of these policies even when the circumstances had changed. According to RBI, Punjab has the highest level of debt to total economic output which has left no money for the government to invest in education and skilling of the youth. This is an example of what has broadly happened in India when it comes to manufacturing. Economic survey of 2016-17 shows that within manufacturing, number of jobs generated for every $1200 is 24 in apparel sector, 7 in leather and footwear, 0.3 in auto industry and 0.1 in steel. 12 out of 23 categories that make up Index of Industrial production were lower in June 2023 than in June 2016. All the jobs being lost are low-skilled, low low-capital using like textiles, apparel and leather
4) A transformation has taken place in marketplace which will help one realize that services are getting more and more embedded into manufacturing as an integral part of an experience on offer. Due to disintegration of manufacturing process into different steps which can be carried out in different countries, thanks to globalization, maximum value of the a product no longer lies in the manufacturing but in initial R&D and designing and the services at the end which includes financing, packaging, marketing, distribution etc. The middle part of manufacturing and assembly has been transferred to the cheapest locations across the world and we as a country would be a fool to compete with them in cost-cutting. In both these ends, services are embedded in the product. Best example to explain this would be any apple product. An apple Iphone is manufactured by Foxconn, its display is of Samsung, camera is of Sony and lens of the camera is of Carl Zeiss but none of the company are even close to the $3 trillion market capitalization of apple. Why is that? Because apple is involved in designing and R&D as well as packaging, financing, marketing, distribution and after sale services like Itunes and cloud storage. So, doling out large government subsidies to manufacturing firms to set up their shop in our country isn't going to create much jobs and even if they do, it won't be a good deal because generating minimal number of labor intensive jobs at such a high price is not efficient. Furthermore, there won't be much trickle down effect of "technology transfer" so to speak as designing and R&D is still being done at places of origination. Another argument in favor of preferring services over manufacturing is that services doesn't require a huge scale to turn profitable. Productivity in services can be increased even without catering to a huge client. This revelation is tailor made for India because the regulatory eco-system has inadvertently led to creation of multiple small firms instead of large ones. Right now, Indian workers are doing the grunt work while the profits are being pocketed by foreign firms. Examples of tilfi and lenskart come to mind when we think of services driving the manufacturing. Tilfi had the idea of creating a luxury Indian brand at the heart of their idea which eventually encouraged the local artisans to produce well while lenskart had the idea of providing the services of eye care which eventually graduated into a business of manufacturing spectacles as fashion accessories with an annual turnover of Rs 5000 crore. In the same breath, it is important to mention here that technological advancement improves the productivity which reduces the price as and increases the demand which nullifies the direct effect of technological change on job losses. The best example of this is the 2013 research by oxford university which announced that 47% of US employment will be at the risk of computerization. In 2023, labor force participation rate in USA is at a 20 year high and unemployment levels are at a 2 decade low.
5) It is necessary to understand that India's predicament right now is to get rich before it gets old. Government policy, in tandem with international policies, has a huge role to play and this will eventually determine what happens in the industry. Best example is of Cipla. In 1972, Cipla created propranolol which is a medicine for hypertensive patients and whose patent was with the multinational ICI. They sued and when Dr. Yusuf Hamid explained the benefits to the government, the government changed the patent law in such a way that any entity cannot apply to patent a product. They can only apply to patent the process that they have come with to make up that product. If any other entity can come up with another way to produce the same product, that shall not be construed as patent infringement. This gave rise to $25 billion generic pharmaceutical industry as of FY 22-23. Sounds like a great success story isn't it? Its because the story is incomplete. In 1994, WTO made all the member countries sign TRIPS (Trade related intellectual property rights) agreement. Under this, government had to amend the patent act such that extended periods of patent protection became a reality and royalty payments to the original creator of a product became a reality. To make matters worse, the enforcement of this agreement wasn't done from 2005 when it was actually implemented but from 1995. So, now, a vibrant generic pharmaceutical industry has been created, however, the money that they have earned through this would've went to R&D to create new drugs but post TRIPS agreement, this couldn't happen and their savings went into repayment of these royalties from 1995.
6) The authors also bust he myth that covid-19 will automatically lead to manufacturing setups of companies to shift from China to India in their bid to diversify. This is unlikely to happen because the advantage of cheap Chinese labor is difficult to offset by India. Second, geographical distance the real reason which increases risk for companies. So shifting the manufacturing base from China to India doesn't address that. Furthermore, they would want to bring back the manufacturing back to their own shores and the disadvantage of expensive labor will be offset by automation
7) In this book, Dr. Rajan and Dr. Lamba have tried to tell us that export-led, low-skill manufacturing no longer offers the most effective path to become a middle-income country. Democracy with capitalistic economic model has a certain advantage to it because Soviet Union had a flourishing military-industrial complex but an authoritarian top down hierarchy didn't allow it to become as innovative as it could've been so it always had to remain dependent on stealing intellectual property. The same idea is true for China as well because their political system was ideal for a catch up infrastructure led growth. However, the communist party has started imposing requirements that AI in China must respect the primacy of Communist party and this shall limit the extent to which firms' exploration for fear of crossing any regulatory boundary. There is a European study which studied the data from 1789 till date in which they showed that the cities that were occupied, where French reforms took greatest hold, had 2.5 times the patents per capita almost a century later in 1900 than the cities that were not occupied. So instead of bashing democracy as a roadblock to our development path, we need to appreciate that we have got it as it fosters outside of the box thinking.
8) When it comes to governance and governmental reforms, we need to aim for a political environment which fosters the idea of staying in power as a consequence of good governance instead of being the primary aim. India needs a little work in this area as instead of being a democracy, it acts more like an "electocracy". Our constitutional structure, influenced by the calibre of governing leaders of the time, was too trusting of the government's good intentions. So, in order to offset this, we need to work twice as hard towards ensuring that the people in general are more aware because better informed beneficiaries improves the quality of governance. A shift needs to happen from providing subsidies and transfers to providing good public services such as education and healthcare
There are many other aspects of our country that have been amply addressed in this book and I must say that everyone should definitely read it to realize what India needs as a nation to become a super power in coming years. Easily the best book that I have read so far in 2024
"Pre-mature deindustrialization need not be a bug but a feature of Indian growth story"
I am going to divide the review point wise so that it remains easy for us to understand each issue and the best concept/example that caught my eye and helped me to understand it better.
1) How countries get rich? Simply by producing more economic output per person. What is economic output in this context? It depends upon what are you bringing to the table through your own unique contribution to the market. If you are a farmer, it can be food grains, if you are a builder then through construction, if you are a software engineer then through the services you are providing or through the code you are making, if you are a doctor then through providing medical services, lawyer through legal services etc. So in order to be rich, India needs to create an ecosystem which fosters skilling of its people with work which is valuable in the market and attracting the PhD talent from abroad to come and teach Indians along with getting involved in creation of cutting edge technology as well. We don't even have to look for foreigner PhDs to attract. All we have to do is produce a conducive enough environment and our diaspora would want to come back
2) Why has India not been able to build a global manufacturing presence? The first and foremost reason for that is that India failed to invest in education of masses as it should've in the first few decades of our independence. China overtook us by a massive margin in educating its masses. It can be seen from the fact that in 1950, average years of education in India was 1 while China was at 1.8. By 1980s, China reached 5.7 and India was at 2.5. Even after the reforms of 1990s, India has only managed to creep up at 3.6. The second reason is that even though Chinese government is seen as a centralized authoritarian edifice, its local government has got enormous freedom to attract foreign investors and business. Since the basic capital acquisition in any big manufacturing business is land, that falls within the purview of local government and mayors in Chinese local governments compete to get the business. Its a race of "who can provide the most conducive environment for fostering business?". In India, only the central government, and to some state governments, seems to be interested in bringing business. Local government in India is so fund starved that they can't even bring basic facilities into their jurisdiction forget about competing with each other for business. No one is claiming that Chinese government doesn't resort to corruption. They do but it acts as a lubricant to quicken the process, not as the prime motivator to undertake the activity itself. China focused in fostering its manufacturing industry to create an exporting behemoth. It went about it by keeping its exchange rates artificially low as well. What was a consequence of it? Since labor laws were virtually non-existent and Chinese government controlled all the labour unions, at the cost of average household prosperity, they created a cheap labor market where companies would want to build factories. Due to these issues, it is sometimes argued that India became a democracy too early. India has a first-world civil society but not the first-world governance capacity, resources, education or skill to address its concerns more creatively. Korea was an autocratic nation and it only became a full democracy when it got richer than US and UK. Other reasons why India failed to become a manufacturing hub consists of tariffs and labor regulations. Tariffs have come down from 125% in 1991 to 13% in 2014. Labor regulations in India become more onerous as a firm increases in size as taxation is based on scale and productivity which incentivizes the firms to remain small. Furthermore, workers becoming permanent by virtue of working for a significant period of time encourages the companies to keep most of them on contracts.
3) Punjab is a great example of premature de-industrialization. In the 60s, green revolution enabled it to become both bread basket and rice bowl of our nation. It happened because many factors such as dams like Bhakra Nangal dam and canals came together to provide perennial supply of water. Punjab agricultural university initiated by Punjab CM Mr. Pratap Singh Kairon helped to bring leading edge research on seeds and farming practices. Agricultural credit was ramped up. Government grain procurement at MSP virtually made grain production risk free. Farmer wealth increased which led to a mini industrial revolution as manufacturing of hydraulic motors, sewing machines, auto parts, textiles, bicycle started coming up. Hero cycles is the biggest success story of that mini industrialization as it became the largest bicycle producer in India by 1975. Around 90s, Punjab was the richest state in terms of per capita income but today it doesn't even feature in top 15. What happened? Circumstances changed. India liberalized, tariffs reduced, global competition came into picture, not being in a central location, not being close to a port, being close to a volatile neighbor, all these translated into high freight and insurance costs. Second, the support that was provided to rice and wheat cultivation in 60s continued which didn't give any incentive to farmers to graduate from agriculture to small manufacturing. The support worsened as free power was given to farmers to draw groundwater. All these freebies increased the cost for industry as the money to the government had to come from somewhere which led to business houses setting their shop somewhere else like Hero's headquarters shifted to Haryana. Furthermore, policy benefits to farmers over such a long period of time increased the political bargaining powers of these beneficiaries. So, they didn't let the government let go of these policies even when the circumstances had changed. According to RBI, Punjab has the highest level of debt to total economic output which has left no money for the government to invest in education and skilling of the youth. This is an example of what has broadly happened in India when it comes to manufacturing. Economic survey of 2016-17 shows that within manufacturing, number of jobs generated for every $1200 is 24 in apparel sector, 7 in leather and footwear, 0.3 in auto industry and 0.1 in steel. 12 out of 23 categories that make up Index of Industrial production were lower in June 2023 than in June 2016. All the jobs being lost are low-skilled, low low-capital using like textiles, apparel and leather
4) A transformation has taken place in marketplace which will help one realize that services are getting more and more embedded into manufacturing as an integral part of an experience on offer. Due to disintegration of manufacturing process into different steps which can be carried out in different countries, thanks to globalization, maximum value of the a product no longer lies in the manufacturing but in initial R&D and designing and the services at the end which includes financing, packaging, marketing, distribution etc. The middle part of manufacturing and assembly has been transferred to the cheapest locations across the world and we as a country would be a fool to compete with them in cost-cutting. In both these ends, services are embedded in the product. Best example to explain this would be any apple product. An apple Iphone is manufactured by Foxconn, its display is of Samsung, camera is of Sony and lens of the camera is of Carl Zeiss but none of the company are even close to the $3 trillion market capitalization of apple. Why is that? Because apple is involved in designing and R&D as well as packaging, financing, marketing, distribution and after sale services like Itunes and cloud storage. So, doling out large government subsidies to manufacturing firms to set up their shop in our country isn't going to create much jobs and even if they do, it won't be a good deal because generating minimal number of labor intensive jobs at such a high price is not efficient. Furthermore, there won't be much trickle down effect of "technology transfer" so to speak as designing and R&D is still being done at places of origination. Another argument in favor of preferring services over manufacturing is that services doesn't require a huge scale to turn profitable. Productivity in services can be increased even without catering to a huge client. This revelation is tailor made for India because the regulatory eco-system has inadvertently led to creation of multiple small firms instead of large ones. Right now, Indian workers are doing the grunt work while the profits are being pocketed by foreign firms. Examples of tilfi and lenskart come to mind when we think of services driving the manufacturing. Tilfi had the idea of creating a luxury Indian brand at the heart of their idea which eventually encouraged the local artisans to produce well while lenskart had the idea of providing the services of eye care which eventually graduated into a business of manufacturing spectacles as fashion accessories with an annual turnover of Rs 5000 crore. In the same breath, it is important to mention here that technological advancement improves the productivity which reduces the price as and increases the demand which nullifies the direct effect of technological change on job losses. The best example of this is the 2013 research by oxford university which announced that 47% of US employment will be at the risk of computerization. In 2023, labor force participation rate in USA is at a 20 year high and unemployment levels are at a 2 decade low.
5) It is necessary to understand that India's predicament right now is to get rich before it gets old. Government policy, in tandem with international policies, has a huge role to play and this will eventually determine what happens in the industry. Best example is of Cipla. In 1972, Cipla created propranolol which is a medicine for hypertensive patients and whose patent was with the multinational ICI. They sued and when Dr. Yusuf Hamid explained the benefits to the government, the government changed the patent law in such a way that any entity cannot apply to patent a product. They can only apply to patent the process that they have come with to make up that product. If any other entity can come up with another way to produce the same product, that shall not be construed as patent infringement. This gave rise to $25 billion generic pharmaceutical industry as of FY 22-23. Sounds like a great success story isn't it? Its because the story is incomplete. In 1994, WTO made all the member countries sign TRIPS (Trade related intellectual property rights) agreement. Under this, government had to amend the patent act such that extended periods of patent protection became a reality and royalty payments to the original creator of a product became a reality. To make matters worse, the enforcement of this agreement wasn't done from 2005 when it was actually implemented but from 1995. So, now, a vibrant generic pharmaceutical industry has been created, however, the money that they have earned through this would've went to R&D to create new drugs but post TRIPS agreement, this couldn't happen and their savings went into repayment of these royalties from 1995.
6) The authors also bust he myth that covid-19 will automatically lead to manufacturing setups of companies to shift from China to India in their bid to diversify. This is unlikely to happen because the advantage of cheap Chinese labor is difficult to offset by India. Second, geographical distance the real reason which increases risk for companies. So shifting the manufacturing base from China to India doesn't address that. Furthermore, they would want to bring back the manufacturing back to their own shores and the disadvantage of expensive labor will be offset by automation
7) In this book, Dr. Rajan and Dr. Lamba have tried to tell us that export-led, low-skill manufacturing no longer offers the most effective path to become a middle-income country. Democracy with capitalistic economic model has a certain advantage to it because Soviet Union had a flourishing military-industrial complex but an authoritarian top down hierarchy didn't allow it to become as innovative as it could've been so it always had to remain dependent on stealing intellectual property. The same idea is true for China as well because their political system was ideal for a catch up infrastructure led growth. However, the communist party has started imposing requirements that AI in China must respect the primacy of Communist party and this shall limit the extent to which firms' exploration for fear of crossing any regulatory boundary. There is a European study which studied the data from 1789 till date in which they showed that the cities that were occupied, where French reforms took greatest hold, had 2.5 times the patents per capita almost a century later in 1900 than the cities that were not occupied. So instead of bashing democracy as a roadblock to our development path, we need to appreciate that we have got it as it fosters outside of the box thinking.
8) When it comes to governance and governmental reforms, we need to aim for a political environment which fosters the idea of staying in power as a consequence of good governance instead of being the primary aim. India needs a little work in this area as instead of being a democracy, it acts more like an "electocracy". Our constitutional structure, influenced by the calibre of governing leaders of the time, was too trusting of the government's good intentions. So, in order to offset this, we need to work twice as hard towards ensuring that the people in general are more aware because better informed beneficiaries improves the quality of governance. A shift needs to happen from providing subsidies and transfers to providing good public services such as education and healthcare
There are many other aspects of our country that have been amply addressed in this book and I must say that everyone should definitely read it to realize what India needs as a nation to become a super power in coming years. Easily the best book that I have read so far in 2024
"Pre-mature deindustrialization need not be a bug but a feature of Indian growth story"
January 26, 2024
There is a lot of 1 star rating for this book. Raghuram Rajan has clearly hurt a lot of sentiments and it is a hopeful note that even the people who are hating this book has atleast read this book. Otherwise this book would have been another echo chamber. The author(s) are courageous enough to address even the most vehement protests and criticism against their research and opinion at the end of the book. This is what should be encouraged more in a democracy. Even if someone is dead wrong about their research they should be brought to public square debated against and the lies if any should be exposed using facts and not be ostracised in society. That’s the beginning of autocracy.
So even if someone disagrees completely with Raghuram Rajan and quite frankly hates him please read the book and verify the data yourself. The language and the case studies used are not that of an anti-national congress supporter. It is the thoughts of a concerned citizen (and for a change a well informed citizen). At no point does he criticise the government’s action which immediately does not follow rational cause. There is no correlation between the centres of pride, growth, literacy for India (Bangalore, Hyderabad,Mumbai, Chennai) and population/voting centres of India (the Great Plains in the north/Hindi belt). This can be shown in a 5 sec tiktok video by the most uninformed Indian. There are surely ailments in our country and our youth is seeped in social media and distractions getting degrees from WhatsApp university and YouTube influencers. Let’s not say that it is a problem throughout the world and dilute the gravity of this situation. Can’t we listen once to great minds and if we really want to criticise them let’s bring down them down using our own logic/intellect. It’s cowardly to just yell “anti-national” from the back of the pack and run away.
So even if someone disagrees completely with Raghuram Rajan and quite frankly hates him please read the book and verify the data yourself. The language and the case studies used are not that of an anti-national congress supporter. It is the thoughts of a concerned citizen (and for a change a well informed citizen). At no point does he criticise the government’s action which immediately does not follow rational cause. There is no correlation between the centres of pride, growth, literacy for India (Bangalore, Hyderabad,Mumbai, Chennai) and population/voting centres of India (the Great Plains in the north/Hindi belt). This can be shown in a 5 sec tiktok video by the most uninformed Indian. There are surely ailments in our country and our youth is seeped in social media and distractions getting degrees from WhatsApp university and YouTube influencers. Let’s not say that it is a problem throughout the world and dilute the gravity of this situation. Can’t we listen once to great minds and if we really want to criticise them let’s bring down them down using our own logic/intellect. It’s cowardly to just yell “anti-national” from the back of the pack and run away.
November 21, 2024
Is it a bad idea for India to follow the 'China Model'?
Why is India behind other countries that started at the same time? Given how it's growing right now, it will reach $10,000 per capita income only by 2060, which is lower than China's today. Has it missed the manufacturing bus? What should it do?
Why did India give a $2 billion subsidy to Micron to set up one factory, which amounts to more than 1/3 of its annual budget on university education?
Especially when no Indian university ranks among the Top 200 globally, despite 4.5 new colleges opening for every single day in the last 20 years?
Why is India's female labor force participation rate lower than Saudi Arabia's? Why is so much of its largely unemployed youth forced to waste away years trying to appear for government exams instead of actively contributing to the economy?
Does the country need an urgent focus on health and education, not just for social welfare, but to ensure it becomes the global power it's projecting itself to be?
Is an iron-fist authoritarian government actually worse for the economy than a comparatively weaker coalition?
Are pluralism, free speech, independent institutions, a vibrant civil society, and checks and balances on government just a concern for the liberal elite in Lutyens' Delhi or are they essential for the country's economy?
How should India take charge on a global scale to influence policies developing from climate change, tariffs, AI Regulation to becoming a voice for other developing nations?
What are some of India's most badass entrepreneurial stories, and what can it do to have more?
These are a few questions this book addresses. Gripping and funny to read. Informative and insightful to remember. Raghuram Rajan is one of the finest economists of our time, and not just in theory or admittedly fantastic books like these. As the governer of RBI, he brought the country's inflation from nearly 10% to 3.78%, stabilized the economy, and oversaw the launch of UPI which every street vendor in India now uses to make and receive cashless payments, among other things. Any developing country would be grateful to have brilliant minds like his, and yet he was removed from his post within a measly 3 years.
During my entire read-through of this book, I kept groaning at the fact that policymakers and politicians who should be forced to read books like these never actually will. But that'd still be okay if they included people like this as their councils, if not as a part of their cabinet itself. And if there's one thing for sure - strong, creative voices like his are not going to be entertained by a government allergic to criticism. A must-read for anyone from India, or even interested in India as a case study among developing nations.
Rating: 5/5
Why is India behind other countries that started at the same time? Given how it's growing right now, it will reach $10,000 per capita income only by 2060, which is lower than China's today. Has it missed the manufacturing bus? What should it do?
Why did India give a $2 billion subsidy to Micron to set up one factory, which amounts to more than 1/3 of its annual budget on university education?
Especially when no Indian university ranks among the Top 200 globally, despite 4.5 new colleges opening for every single day in the last 20 years?
Why is India's female labor force participation rate lower than Saudi Arabia's? Why is so much of its largely unemployed youth forced to waste away years trying to appear for government exams instead of actively contributing to the economy?
Does the country need an urgent focus on health and education, not just for social welfare, but to ensure it becomes the global power it's projecting itself to be?
Is an iron-fist authoritarian government actually worse for the economy than a comparatively weaker coalition?
Are pluralism, free speech, independent institutions, a vibrant civil society, and checks and balances on government just a concern for the liberal elite in Lutyens' Delhi or are they essential for the country's economy?
How should India take charge on a global scale to influence policies developing from climate change, tariffs, AI Regulation to becoming a voice for other developing nations?
What are some of India's most badass entrepreneurial stories, and what can it do to have more?
These are a few questions this book addresses. Gripping and funny to read. Informative and insightful to remember. Raghuram Rajan is one of the finest economists of our time, and not just in theory or admittedly fantastic books like these. As the governer of RBI, he brought the country's inflation from nearly 10% to 3.78%, stabilized the economy, and oversaw the launch of UPI which every street vendor in India now uses to make and receive cashless payments, among other things. Any developing country would be grateful to have brilliant minds like his, and yet he was removed from his post within a measly 3 years.
During my entire read-through of this book, I kept groaning at the fact that policymakers and politicians who should be forced to read books like these never actually will. But that'd still be okay if they included people like this as their councils, if not as a part of their cabinet itself. And if there's one thing for sure - strong, creative voices like his are not going to be entertained by a government allergic to criticism. A must-read for anyone from India, or even interested in India as a case study among developing nations.
Rating: 5/5
April 6, 2024
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In “Breaking the Mould,” the authors dissect India’s pivotal moment: soaring economic rankings juxtaposed with job scarcity. They advocate an innovative, Indian-centric path, focusing on human capital investment, high-skilled sectors, and fostering creativity. Emphasizing democratic values, they call for governance reforms and decentralization. With candour and insight, the book navigates India’s challenges, urging a break from conventional models towards a future brimming with possibilities. It’s a vital read for all invested in India’s trajectory—a concise roadmap for policymakers, entrepreneurs, and citizens alike.
The writers propose that the peruser invest heavily in the headway the country has made, yet alert that we shouldn’t go overboard and celebrate early. The creators have underlined that India needs a culture of development and Imagination to fortify its administration-based industry in the economy and to foster administrations combined with assembling. I should show respect for the two creators for their work to make the substance so satisfactory that any layman will have the option to comprehend the issues which even the most talented view as challenging to see.
The writers are sufficiently gutsy to address even the most over-the-top heartfelt fights and analyses against their examination and assessment toward the finish of the book. While the book sparkles with its information-driven approach and significant suggestions, some could find the specialized subtleties testing. The book is loaded with experiences and influential contentions on why we want an exceptional answer for the one-of-a-kind development way we have taken. A convincing read for all, it rouses an aggregate vision for every resident to add to India’s examples of overcoming adversity.
In “Breaking the Mould,” the authors dissect India’s pivotal moment: soaring economic rankings juxtaposed with job scarcity. They advocate an innovative, Indian-centric path, focusing on human capital investment, high-skilled sectors, and fostering creativity. Emphasizing democratic values, they call for governance reforms and decentralization. With candour and insight, the book navigates India’s challenges, urging a break from conventional models towards a future brimming with possibilities. It’s a vital read for all invested in India’s trajectory—a concise roadmap for policymakers, entrepreneurs, and citizens alike.
The writers propose that the peruser invest heavily in the headway the country has made, yet alert that we shouldn’t go overboard and celebrate early. The creators have underlined that India needs a culture of development and Imagination to fortify its administration-based industry in the economy and to foster administrations combined with assembling. I should show respect for the two creators for their work to make the substance so satisfactory that any layman will have the option to comprehend the issues which even the most talented view as challenging to see.
The writers are sufficiently gutsy to address even the most over-the-top heartfelt fights and analyses against their examination and assessment toward the finish of the book. While the book sparkles with its information-driven approach and significant suggestions, some could find the specialized subtleties testing. The book is loaded with experiences and influential contentions on why we want an exceptional answer for the one-of-a-kind development way we have taken. A convincing read for all, it rouses an aggregate vision for every resident to add to India’s examples of overcoming adversity.
January 7, 2024
The book is an interesting read from the point of view of looking at the key issues that India faces. Aspects like education, healthcare, employment are provided in much detail with quite a bit of facts on what India lacks. Having lack of infrastructure, insurance coverage, not providing the natal cover. India needs to do a lot of catching up to do.
However the book is focused on putting innovative ideas into place to break the mould. However the ideas do not add any enthusiasm to the narrative. We all understand Gen AI/ Chatgpt might be the future. But just putting that a Benaras sari vendor selling goods through digital marketplace is not an idea. Ideas could have been privatizing running of government school like PPP, or having OPD insurance for all. Ideas are something that should be radical. The book is all hat and no cattle. Too much information on issues but nothin in reality that can break the mould.
On top of all of this, what clearly came out that Raghu does not likes the current government or what they do. Talking about the much hyped India stack, it was quite an interesting narrative without reference to the existing government which actually had implemented the same.
Raghu goes on to describe the initiation of the India stack from a letter in 2009 during the UPA government which conceived the idea of UPI. Post this Nandan Nilekani took charge to implement the same. And it was "Raghu's" RBI that fought with banks to let out non-banks to star propagating UPI. Well in the book suddenly RBI became Raghu's RBI. If Raghu would not have been in RBI probably I would not have been reading this book.
But Raghu took the credit on the growth of GooglePay, PhonePe etc but did not mention a single mention of the role of existing government in all of this which was quite strange to the extent they did not exist at that time at all.
However the book is focused on putting innovative ideas into place to break the mould. However the ideas do not add any enthusiasm to the narrative. We all understand Gen AI/ Chatgpt might be the future. But just putting that a Benaras sari vendor selling goods through digital marketplace is not an idea. Ideas could have been privatizing running of government school like PPP, or having OPD insurance for all. Ideas are something that should be radical. The book is all hat and no cattle. Too much information on issues but nothin in reality that can break the mould.
On top of all of this, what clearly came out that Raghu does not likes the current government or what they do. Talking about the much hyped India stack, it was quite an interesting narrative without reference to the existing government which actually had implemented the same.
Raghu goes on to describe the initiation of the India stack from a letter in 2009 during the UPA government which conceived the idea of UPI. Post this Nandan Nilekani took charge to implement the same. And it was "Raghu's" RBI that fought with banks to let out non-banks to star propagating UPI. Well in the book suddenly RBI became Raghu's RBI. If Raghu would not have been in RBI probably I would not have been reading this book.
But Raghu took the credit on the growth of GooglePay, PhonePe etc but did not mention a single mention of the role of existing government in all of this which was quite strange to the extent they did not exist at that time at all.
May 31, 2025
This book was a mixed bag.
However, the strong parts are really strong. Although it starts off a bit slow and seemingly directionless, the second part is where it shines. The book does not offer anything out of the box that we don't know, but it succeeds at highlighting the pertinent issues plaguing the current system. Especially the second part makes for a great consistent read. I also liked the question-answer format in the third part. That was a pretty interesting read.
Personally, I did not feel that this book is too critical of the government. If anything, it in fact highlights why good governance and social capital are necessary and inseparable from economic growth and equity. However, I felt there was a pacing issue - especially in the first half. Some parts are protracted and they drone around for quite a long time. In fact, it feels like the first part beats around the bush with a bizarre placement of case studies here and there, that could have been done much better. Furthermore, it does not help that the humour falls flat.
Maybe the writing style was not to my taste. But this is not a piece of fiction. It's a pretty good take on the Indian economy and the second part makes for a great read.
Learnt a lot.
However, the strong parts are really strong. Although it starts off a bit slow and seemingly directionless, the second part is where it shines. The book does not offer anything out of the box that we don't know, but it succeeds at highlighting the pertinent issues plaguing the current system. Especially the second part makes for a great consistent read. I also liked the question-answer format in the third part. That was a pretty interesting read.
Personally, I did not feel that this book is too critical of the government. If anything, it in fact highlights why good governance and social capital are necessary and inseparable from economic growth and equity. However, I felt there was a pacing issue - especially in the first half. Some parts are protracted and they drone around for quite a long time. In fact, it feels like the first part beats around the bush with a bizarre placement of case studies here and there, that could have been done much better. Furthermore, it does not help that the humour falls flat.
Maybe the writing style was not to my taste. But this is not a piece of fiction. It's a pretty good take on the Indian economy and the second part makes for a great read.
Learnt a lot.
May 8, 2024
I first came to know about the book in the Jaipur Lit Fest in February. I attended a session where Raghuram Rajan was talking about this title and various issues regarding the infrastructure of India. Being a smooth talker, he was able to get my attention and the book as well.
The book touches on various subjects like education, healthcare and employment. There are certainly radical ideas alongside past accounts of history. I liked the way the author does an amalgamation of anecdotes on the topics to show the highs and lows of a particular topic. The anecdote about ChatGPT and a court-case against an aviation company made me laugh.
It's a very persuasive book in terms of the change in the dynamics needed in governance and administration structure in India. And, these chapters were really difficult for a fiction-lover to get into easily because the text read like an editorial column, but anyhow I managed and I can say that learning/understanding the SMILE curve in industrial framework made me satisfied.
The only thing that made me wonder at times is that this book surely gives a lot of information and at times almost touches the solution of problems but never reaches the base concretely. It's sort of a book of ideas. Of course there are multiple suggestions to refer to go beyond the traditional path to build a unique system and that is the main highlight of this book.
The book touches on various subjects like education, healthcare and employment. There are certainly radical ideas alongside past accounts of history. I liked the way the author does an amalgamation of anecdotes on the topics to show the highs and lows of a particular topic. The anecdote about ChatGPT and a court-case against an aviation company made me laugh.
It's a very persuasive book in terms of the change in the dynamics needed in governance and administration structure in India. And, these chapters were really difficult for a fiction-lover to get into easily because the text read like an editorial column, but anyhow I managed and I can say that learning/understanding the SMILE curve in industrial framework made me satisfied.
The only thing that made me wonder at times is that this book surely gives a lot of information and at times almost touches the solution of problems but never reaches the base concretely. It's sort of a book of ideas. Of course there are multiple suggestions to refer to go beyond the traditional path to build a unique system and that is the main highlight of this book.
July 21, 2024
Encapsulates well how India got to where it is today, the problems faced, and what can be done moving forward.
Something salient to highlight is how India has skipped the traditional path to prosperity for developing countries - that is, starting from manufacturing. Rather, India is now primarily a services-oriented country. Having missed the boat and with reshoring the likely topic du jour, it is unlikely India can rely on manufacturing anymore.
The authors suggest leveraging technology to export its services, but I harbor some doubts on how receptive the rest of the world is to Indian services (apart from IT-related tasks). A whole ton of work needs to be done to change existing conceptions about India as a service provider.
It is also remarkable how much of India remains mired in poverty, with lack of healthcare and education. That has to be solved if the growth potential of the country is to be realized. There is only so much growth one can achieve without allowing the poor to move up into the middle class.
Many suggestions are idealistic and long-term at best, but one area to monitor is how crony capitalism and conglomerates fare in the next few years.
Something salient to highlight is how India has skipped the traditional path to prosperity for developing countries - that is, starting from manufacturing. Rather, India is now primarily a services-oriented country. Having missed the boat and with reshoring the likely topic du jour, it is unlikely India can rely on manufacturing anymore.
The authors suggest leveraging technology to export its services, but I harbor some doubts on how receptive the rest of the world is to Indian services (apart from IT-related tasks). A whole ton of work needs to be done to change existing conceptions about India as a service provider.
It is also remarkable how much of India remains mired in poverty, with lack of healthcare and education. That has to be solved if the growth potential of the country is to be realized. There is only so much growth one can achieve without allowing the poor to move up into the middle class.
Many suggestions are idealistic and long-term at best, but one area to monitor is how crony capitalism and conglomerates fare in the next few years.
February 26, 2025
This is the book that any curious Indian citizen might want to take up, if India is progressing. The media in any form is controlled to an extent, that it has become a great difficulty to know what is exactly happening. The media has failed to be a medium of conveying facts and has become a tool for optics. This book is the direct tool to know what is happening in India in an economic Outlook.
Every developing country is figuring out the key that will unlock its doors to becoming a developed country, and so is India. Erring through the path is unavoidable, but reevaluating the path constantly especially by diplomats and economists is essential.
In this book, the authors navigate things that worked in the past, things that no longer serve our needs and goals and things we need to incorporate to achieve the growth we are longing for. This dialogue is the need of the hour.
On the other hand, I expected fact tables and graphs to explain the economic phenomena or the data. The lack of any such visual representation was disappointing.
Every developing country is figuring out the key that will unlock its doors to becoming a developed country, and so is India. Erring through the path is unavoidable, but reevaluating the path constantly especially by diplomats and economists is essential.
In this book, the authors navigate things that worked in the past, things that no longer serve our needs and goals and things we need to incorporate to achieve the growth we are longing for. This dialogue is the need of the hour.
On the other hand, I expected fact tables and graphs to explain the economic phenomena or the data. The lack of any such visual representation was disappointing.
February 21, 2024
In "Breaking the Mould," renowned economist Raghuram Rajan and Rohit Lamba dissect India's economic realities, proposing a bold, future-oriented vision. They challenge traditional development models, urging India to forge a unique path built on human capital investment, innovation, and practical solutions. While the book shines with its data-driven approach and actionable recommendations, some might find the technical details challenging. Additionally, incorporating a political angle as Rajan often does, may spark debates about potential biases. Despite these nuances, "Breaking the Mould" is a thought-provoking read for anyone invested in India's economic journey, prompting critical reflection and challenging conventional approaches.
May 21, 2024
2.5*
Well intentioned, but fails to hold your attention. Starts off well, with real life case studies of many new Indian entrepreneurs. However, the middle portions become really dull and test your patience. Especially since the authors just keep adding stuff to their laundry list of 'reforms' and keep touting more globalization as a panacea for all ailments. At the end, it gets downright silly, in its attempt to 'converse' with a real citizen!
No wonder you have to resort to such slapstick stuff, if you are so disconnected from the masses.
Funnily enough, there was a passing comment in the book about this not being an 'elitist, liberal project'. Well guess what this book turned out to be eventually!
Well intentioned, but fails to hold your attention. Starts off well, with real life case studies of many new Indian entrepreneurs. However, the middle portions become really dull and test your patience. Especially since the authors just keep adding stuff to their laundry list of 'reforms' and keep touting more globalization as a panacea for all ailments. At the end, it gets downright silly, in its attempt to 'converse' with a real citizen!
No wonder you have to resort to such slapstick stuff, if you are so disconnected from the masses.
Funnily enough, there was a passing comment in the book about this not being an 'elitist, liberal project'. Well guess what this book turned out to be eventually!
January 12, 2024
The book is not without flaws. You can nitpick the details of industries it cites and at times I found it a bit too idealistic.
But it gives a very clear picture of where we are now and why we cannot grow fast enough without better governance structure and focus on education, health and research. I would also add creating a culture which integrates smart people from all over the world despite their personal beliefs to the list.
The book is full of insights and persuasive arguments on why we need a unique solution to the unique growth path we have taken. If you ever wonder about the economic path of India, you should read this book.
But it gives a very clear picture of where we are now and why we cannot grow fast enough without better governance structure and focus on education, health and research. I would also add creating a culture which integrates smart people from all over the world despite their personal beliefs to the list.
The book is full of insights and persuasive arguments on why we need a unique solution to the unique growth path we have taken. If you ever wonder about the economic path of India, you should read this book.
March 12, 2024
Wonderful book! Some might call it biased but it is not. The book shows the data to make its point. A case in point being the PLI schema and its benefits and fallacies. Put data aside for a moment. The book also provokes one to think about basic questions that affect us day to day. I appreciate what the current government has done for the infrastructure and yet it falls short of expectations in many other areas which has resulted in India not growing upto its potential. There are lessons for both policymakers as well as common man like me. I would strongly recommend everyone to read this book.
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