How Big Government is harming us
In this nearly 800-page tome, Vivek Kaul — writer, economist and author of the well-known Easy Money trilogy — critically dissects the complexities of expansive and promising Indian policies from an unbiased researcher’s perspective. India’s Big Government: The Intrusive State & How It’s Hurting Us is an unconventional, interdisciplinary book that cuts across sectors of banking, infrastructure, education, manufacturing and industry, land, taxation, and employment in post-Independence India, underscoring the necessity for the state to more effectively address critical matters, rather than attempting to do “too much”.
“Indian government is not big when it comes to the number of people it employs. It is big in the number of things it tries to do, and hence, in the process, it messes up other important things.” This is the central theme of the book, which brings to light, through several different lenses, various flawed government approaches to policies and their execution.
While critiquing the Indian government’s over-zealous policies, the book challenges many entrenched notions. At the outset, the book begins by challenging a widespread, and slightly incomplete, conception: Adding nuance to the conventional wisdom, which traces the government’s involvement in “all sorts of businesses” to the “socialist” period of India’s first prime minister. The genesis of “Big Government” remains with Jawaharlal Nehru’s socialist model, but is ironically interceded by Mr Kaul’s contention that Indian industrialists (JRD Tata, GD Birla, John Mathai, Purshottamdas Thakurdas, Kasturbhai Lalbhai, and AD Shroff) were the first ones, at a meeting in Mumbai in 1944, to offer the option of the Big Government to the Indian government.
Every claim is backed up by thorough research and supplemented by other and often opposing aspects of the same debate. The claim, for instance, that public sector enterprises that came about shortly after Independence were largely loss-incurring, and continued to incur losses in 2014–2015, is followed by an interesting study of the public sector enterprises that are, in fact, very profitable: Oil & Natural Gas Corporation, Coal India and NTPC were three of the top 10 profit-making public sector enterprises in 2014–2015, which significantly outweighed the losses incurred by the top 10 loss-incurring public sector enterprises.
The writer has also demonstrated a remarkable ability to coalesce several wide-ranging themes about the political economy and cohere them into the single overarching argument. An important (as well as alarming) part of the book challenges an internationally pervasive notion about India’s putative “demographic dividend” driving growth, which forecasts that the country will be the largest contributor to the global demographic transition. When it comes to the creation of jobs, Mr Kaul finds that economic “growth” does not necessarily translate into corresponding, or even adequate, employment opportunities.
The book weaves in discussions about the non-performing assets of India’s public sector banks, corruption and black money, labour laws, land acquisition, physical infrastructure, a lax taxation system with pernicious costs, state interference in the agricultural sector, and finally, spurious money-allocation practices of the rural jobs guarantee scheme, ultimately illustrating how Big Government acts as a “funnel which is very broad at the top”. The analogy may be said to foreground the zeitgeist of the entire book, demonstrating the author’s argument that policies at the top are designed to perfection, with the appropriate and full-proof checking and regulation systems in place, but at the implementation level, the funnel seriously tapers.
Although the book is a goldmine of data that draws from an eclectic and intensive research methodology, India’s Big Government is heavily descriptive. Missing links found in the book were examples drawn from other states where similar policies were implemented more successfully, and/or, the author’s own constructive advice on how to remedy the inefficient state action that he discusses.
The author makes very interesting analogies (especially, “Of gray rhinos, and not black swans” in the context of the problems facing India), that accurately capture the issues that are discussed. Importantly, the book always begins by exploring the genesis of a policy or issue, with an amusing caricature at the beginning of every chapter. The exhaustive study, that could be said to be nearly as ambitious as the government it criticises, raises important questions alongside pertinent quotations by the most intriguing array of people — from Benito Mussolini, to Shakeel Badayuni’s poetry, to Bruce Springsteen’s songs, to Manmohan Singh’s speeches — altogether making for an informative and unforgettable read.
The claim that public sector enterprises... were largely loss-incurring, and continued to incur losses is followed by an interesting study that [these] are, in fact, very profitable