Capitalist talk | Book Review – The Struggle and the Promise: Restoring India

Nowshad Forbes’ book The Struggle and the Promise, several cartoons by R. K. Laxman and a few quotes from PG Woodhouse’s work come as a surprise in a book on economics. Clearly, the author has a great sense of humor that is displayed through the book, which provides a completely capitalist view of how the economy could otherwise be pushed to another level. Having been the head of CII for two years and a very successful businessman, the author knows what the problems of the economy are and how to promote them, so the book is not an academic prescription.

Forbes strongly believes that the Indian economy could be on track to grow at 8-9% of GDP, if we get some things in order. Manufacturing needs to be a driver and this is something that has always been recognized, although the service sector has rarely been seen to grow disproportionately. Also, we need to focus on education and this is something that needs to be the focus of government. We need to have efficient and well-qualified workforce in relevant fields.

In addition to this kind of workforce, we need to innovate quickly and companies need to focus more on research and development, because that’s what it has to go through. Interestingly, he said that CII would soon launch a university that would cater to the underprivileged sections of the society. This is good news considering that most of the institutions of excellence are for the privileged in India, be it school or university, which strengthens the self-fulfilling spiral where there is better profit.

Forbes has some detailed chapters on these aspects where it provides ample food for thought from skilled economists as well as its extensive research from other countries. He is in favor of free trade and when he points out the double standards of some industry leaders who want protection every time they see imports as a threat.

He pointed to the famous event of the Bombay Club, which welcomed economic reforms but opposed the free flow of imports when it affected their industry. Therefore, there is a dilemma regarding the approach to industrial reform.

The author makes a very significant point in the course of his book, which he says he assimilated when he was younger, that in order to do business well one should not be in a field that is not dependent on the government. This is a golden rule for all entrepreneurs who want to get into business because they are always stuck in a maze of bureaucracy. So, doing something with natural resources is primarily a risky business because no one ever knows where it will go, as was the case with mining or telecommunications. The second is corruption. Coming from an industrialist is another indicator of how this business should be done. Being in the engineering business, Forbes has managed to avoid the hassle of doing business. However, this may not always be possible because it is felt that speed is essential to make things move in India or one’s capital may get stuck.

The last few chapters are extremely entertaining because there is no description of his time as CII chief. He mentioned an official party where the chief minister and other prominent people abstained from alcohol, which was presented to them as ice floating soup, which showed double the standard prevailing in the society. Understandably, there are portraits of the President and the Prime Minister in various government offices, and the canvas has been expanded to decorate the walls with more local heroes.
Interestingly, he mentioned that the North Block, which has great architecture, is not well maintained, anyone would go there and prove it. However, when one enters the Ministry of Defense in the South Block, things are quite different, which raises the question of whether the Ministry of Defense is dependent on it. There are similar differences between the Ministries of Commerce and Foreign Affairs where there are wide differences. The broad point he makes here, which is disturbing, is that ministries can be relied upon to do so efficiently when they are unable to manage their own premises to implement fairly complex projects?

The reader will agree with some of the anecdotes he has described. He once told a minister that ideally people like Kanhaiya Kumar, known as JNU, should have ignored the government. Instead, the media came and made him a hero and finally a politician. This opinion was agreed upon. He is also critical of the industrialists who are highly critical of the government in one way or another, but behave differently once in public forums. One of them called FM the greatest in Indian history, which was the biggest surprise on FM’s face!

Some may disagree with Forbes because he argues that the government has not favored foreign-enlarged Indian economists. Here, the alternative view is that they may not be proficient and lack the ground knowledge that native nurtured economists have. He did not sneer when he said that the government was not tolerant of dissent and that it had been voiced by some industrialists in the past. The media is also targeted by the organization for carrying articles that criticize the government and so there is no room for reflection.

Quite frankly, this book is written from a capitalist perspective because it is believed that industry will be the driver of the economy. Not surprisingly, the narrative really doesn’t say much about agriculture, which some might argue is a key pillar of future growth. Similarly, while the CII outlook is generally large industry, the role of SMEs, which have a lot to do to deliver on their promises, is under-played here. This, one might say, is the prerogative of the author.

Forbes must be credited for this amazing book that is so well written and has done so much to make it readable and insightful.

Madan Sabanvis is the Chief Economist at Bank of Baroda

Struggle and Promise: Restoring India’s potential
Nowshad Forbes
Page 375, Rs.699

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