1) "Something tremendous is happening in India, and Das, with his keen eye and often elegant prose, has his finger firmly on the pulse of the transformation…His stories enliven what could easily have been a dull piece of economic history. Das had a ringside seat at the events he describes, and the result is an engaging account that moves easily from the big picture to the telling anecdote….Part memoir, part journalism, and part history, the book begins shortly before independence and continues until the new millennium. ''The theme of this book,'' he writes, ''is how a rich country became poor and will be rich again.''  --The New York Times Book Review

3) "Informative, entertaining, and basically correct about India’s need to embrace capitalism more wholeheartedly, for all the costs and risks."--The Economist

4) "One of the most readable and insightful books to appear on India’s tortuous economic path…since shaking off British rule"--Business Week

5) The revised edition of Mr Das's book, India Unbound, is at the top of the country's best-seller list for non-fiction, tapping into a vein of renewed self-confidence and national pride that is itself a central theme of his study. Part memoir, part history, part travelogue, part polemic, India Unbound dissects the failures of the country's Nehruvian socialist experiment and vividly describes the changes that are transforming the daily lives and outlooks of the country's 1bn people.

Mr Das's central argument is that India's market reforms, which began in 1991, are proving as revolutionary as Deng Xiaoping's embrace of capitalism in China in 1979--it is just that they are occurring more slowly and have so far failed to generate as much outside interest… In fits and starts, he argues, India's liberalising reforms are slowly unleashing the country's "animal spirits" and will eventually lead to its emergence as one of the world's great economic powers. By 2025, he predicts, India could have increased its share of global output from 6 per cent to 13 per cent, making it the third largest economy in the world.

While India may never roar ahead like the Asian tigers, he argues, it can at least advance like a wise elephant, moving steadily and surely, pausing occasionally to reflect on its past and to enjoy the journey.--John Thornhill, Financial Times, Aug 21, 2002

7) "The strength of his inquiry lies in its castigation of those who inherited the running of India from the British. He is commendably scathing about Nehru and his daughter Indira Gandhi, who had her father's hubris and contempt for businessmen but not a trace of his erudition… In most developed democracies, someone like Mr. Das would be a legislator or a cabinet minister. The author regards economic growth as the only way to strengthen Indian democracy. ...[and] his optimism is potent when he says, ‘We have good reasons to expect that the lives of the majority of Indians in the 21^st century will be freer and more prosperous than their parents. Never before in recorded history have so many people been in a position to rise so quickly.’"--The Wall Street Journal

8) "For American readers…this book will come as a welcome surprise…it could be an eye-opener to readers unfamiliar with the radical transformations currently under way in the subcontinent".--The Washington Post Book World

9) "INDIA UNBOUND is a lively, interesting and well documented answer--the first of its kind--to a key question: why was India rich, why is it poor, when will it be rich again? It is also full of the kind of stories which make that fascinating country come alive for the reader."--Olivier Bernier, author of "The World in 1800"

10) "When George Bernard Shaw famously wrote that ‘if all the economists in the world were laid end to end, they would never reach a conclusion,’ he clearly didn't have Das' book in mind. Das weaves accessibly written history, thumbnail biographies of legendary Indian industrialists and entrepreneurs, his own experiences as a young executive building up the Vicks brand in the Indian heartland and accounts of Kafkaesque encounters with bureaucracy, into a book that traces ‘the struggle of one-sixth of humanity for dignity and prosperity’ and comes to pretty clear conclusions. Das is, in tempered and measured prose, scathing…Having constructed a comprehensive indictment of India's economic failures, Das is optimistic about the liberalization that has opened the economy in the 1990s. He sees India on the brink of a great transformation, fueled by the Internet that will rival Japan's after the Meiji Restoration…Das writes in an engaging style, sprinkling his text with a well-chosen array of quotations. There are layman-friendly discussions of economic theories of poverty, and his arguments are leavened with a close reading of economic texts, both classic and contemporary. But what shines through is the telling anecdote, the personal example, the remembered conversation."--Los Angeles Times

11) "Remarkable...heads and shoulders above the customary books .... This story, so much more persuasive and effective…[as] Das traces his life as a journey headed in the same direction as the business life of his country, an almost literary scheme that is unusually effective...The issues of business vs. private enterprise played against the somewhat parallel questions of modernity vs. tradition and nationalism against cosmopolitanism…. This elegant essay has something for everyone."--St. Louis Post-Dispatch

12) "I do not know of any book that describes the impact of India's economic policies on her growth during the post-independent India as analytically, logically and vividly as this one. The author's words are a gentle cry for India's poor. This brilliant work in political economy is for all young Indians, especially budding politicians and IAS probationers. It deserves to be translated in all Indian languages so that the common person can become better educated about the policies that they want for their country."--Narayana Muthy, CEO of Infosys Ltd, ‘India’s most respected businessman

13) "Gurcharan Das has written a paean to liberalisation (India Unbound, Viking)-- arguably the most readable book on the reforms of the 1990s. Gurcharan is a magical writer and a great story-teller; his account of the reforms is so upbeat that even I thought we had accomplished something."--Ashok Desai, Business Standard

14) "Gurcharan Das's view of the recent history of India, particularly the socio-politico-economic history of the country is unabashedly right. His keen eye and sharp sense of sound captures the panorama of he last 50 years of Indian history in his own way. . . both fascinating and interesting . . . "India Unbound" keeps your interest in top gear throughout the book."--Shunu Sen, Business Line

15) "His account of the behind the scenes activity is illuminating. . . "India Unbound" is bound to become an essential component of the reading list for anyone interested in the contemporary Indian economy."--Sushma Ramachandran, The Hindu

16) "The former CEO of Procter and Gamble India paints a rich canvas of the new India. . . there are great moments of insight."--Sunil Jain, Indian Express

17) "Gurcharan Das is a good storyteller. He weaves a series of unconnected actions into a pattern with some sort of theme. His technique is to put himself, often vicariously as an observer, occasionally a participant, into the events he describes; in this way he gives immediacy to history."--Sudhir Mulji, Business Standard

18) "This is a great book to read…what permeates the book is the optimism of the million reformers who have been unshackled."--Bibek Debroy, Outlook

19) "Why has a country as bountifully blessed as India achieved so little in a half century of freedom? Gurcharan Das provides a fascinating interpretation of the possible reasons in India Unbound…Not often does one come across a former CEO of a major organization and currently head of a venture capital fund, who is also well-read in a wide range of subjects, ranging from economics to philosophy to poetry. And if one does come across them on rare occasions, not many can wield a pen as dexterously as Das does." --V.S. Mahesh, Business India

Techno-Brahmins
A writer and executive extols the new India and its rising consumer class.
AKASH KAPUR

In 1997, when India celebrated the 50^th anniversary of its independence, the world paid homage to its most populous democracy. Other countries had grown richer in those postcolonial years. Many had escaped the political and religious convulsions that had so often shaken the region. But almost alone in the non-Western world -- barring a short interruption in 1975, when Indira Gandhi declared a state of emergency -- India had clung doggedly to its democratic convictions. A slew of books commemorated the achievement. One of the finest, Sunil Khilnani's ''Idea of India,'' described India's polity as ''the third moment in the great democratic experiment launched by the American and French Revolutions.''

Like many of these books, Gurcharan Das's ''India Unbound'' is a broad summing-up of the last half century. Part memoir, part journalism, part history and part management bible, the book begins shortly before independence and continues until the new millennium. A former C.E.O. of Procter & Gamble in both India and America, and currently a venture capitalist and consultant, Das is less concerned with political than with economic history. And where authors like Khilnani cherish the revolution that began with independence in 1947, Das does not find full cause for jubilation until 1991, when India unleashed a series of economic reforms, the start of an ''economic revolution'' that he believes ''may well be more important than the political revolution.''

Those reforms were forced upon India, adopted less than enthusiastically when the nation found itself with foreign exchange reserves worth only two weeks of imports. Over the course of what Das calls a ''golden summer,'' a newly installed government surprised everyone by easing foreign exchange restrictions, devaluing the rupee, lowering import tariffs and undoing the byzantine controls that had stifled Indian industry. Many -- Das included -- feel the reforms should have gone further, but the results nonetheless have been dramatic: after decades of chugging along at the so-called Hindu rate of growth (a dismal 3.5 percent per year), the economy grew by an average of 7.5 percent in the mid-1990's. The growth in disposable incomes, and the opening up of the country to world markets, has altered the face of Indian society, creating a new consumer middle class. Das argues that these changes are only the beginning of a dramatic reversal of fortunes. ''The theme of this book,'' he writes, ''is how a rich country became poor and will be rich again.''

At the heart of ''India Unbound'' is a deep ambivalence about Jawaharlal Nehru, the architect of Indian independence but also of its disastrous economic policies. Das recognizes the political contributions made by Nehru, and he writes of the admiration he felt as a young man for the handsome leader whose lofty ideals inspired a nation. But, echoing an increasingly common attitude in modern India, he feels that Nehru's faith in Soviet-style central planning cheated the nation of the prosperity enjoyed by some of its Southeast Asian neighbors. Nehru's revolution, Das argues, was incomplete, delivering political liberty but failing to unshackle the nation economically. In one of the more eloquent expressions of this sentiment, he tells of a meeting at which the industrialist Rahul Bajaj is threatened with imprisonment for producing more scooters than permitted by his quota. ''My grandfather went to jail for my country's freedom,'' replies Bajaj. ''I stand ready to do the same for producing on behalf of my motherland.''

Such stories enliven what could easily have been a dull piece of economic history. Das had a ringside seat at the events he describes, and the result is an engaging account that moves easily from the big picture to the telling anecdote. Through Das, we are introduced not just to the standard pantheon of political figures but to a range of lesser-known characters from the corporate world. These include old-fashioned industrialists like Bajaj and also a new brand of businessman -- entrepreneurs like Narayana Murthy, the C.E.O. of Infosys, India's most successful software company, and Subhash Chandra, the founder of a global Hindi satellite television channel, often called ''the Murdoch of Asia.''

Das's sympathies clearly lie with this later generation of managers. He sees the earlier breed as dinosaurs, pampered by a protectionist government and doomed to oblivion. His enthusiasm for the new order becomes most apparent in the book's final section, where he succumbs to a certain giddiness over India's prospects in the 21st century. Das is particularly excited about India's software industry, a sector whose great success has led many to predict -- as the head of India's largest mutual fund recently did -- that ''what oil is to the Middle East, infotech is to India.''

Such optimism is not entirely misplaced. India's high-tech industry has been the most visible success of the reforms, generating fabulous wealth and great opportunities. What is less clear is the extent to which this wealth is trickling down to the 300 million Indians who still live in poverty and the 75 percent who live in the countryside, far away from the new economy. Das is undoubtedly right that poverty has tarnished India's democracy, but he seems less concerned that unequal prosperity may have the same effect. To be fair, he does argue that democracy and capitalism need not be mutually exclusive, and cites from the work of

Amartya Sen, who has repeatedly written on the importance of integrating the two. But despite his professed preference for ''democratic capitalism,'' Das's faith in free markets can come across as overly zealous, as when he complains that too many Indians ''are still listening to the background noise of democracy when we could be listening to the music of entrepreneurship.''

However, one doesn't need to share Das's unbridled fervor for markets to appreciate this book. ''India Unbound'' is like an opinionated but insightful guide to a rapidly changing nation in which old clichés about spirituality and poverty are increasingly irrelevant. Near the end, Das writes about his son, who has decided to leave a job in New York and return to India to start a company. ''He's caught up in the spirit of our times, when every young person is willing to risk the security of a job to pursue his passion,'' Das writes. That ''spirit'' signals a dramatic widening of horizons, a new self-confidence. Something tremendous is happening in India, and Das, with his keen eye and often elegant prose, has his finger firmly on the pulse of the transformation.

Akash Kapur is a contributing editor at Transition magazine.

As a rule, books written by businessmen are shameless exercises in auto-hagiography, smug tomes of self-congratulation and banality offering about as much intellectual honesty or literary merit as a corporate filing with the Securities and Exchange Commission. I can see how CEOs might view themselves as repositories of wisdom and narrative brilliance (which of their overpaid lackeys is going to tell them otherwise?), but I often wonder why respectable publishing houses choose to encourage this delusion. Surely editors aren't so mercenary that they'd print the musings of moneymen solely to make money?

Fortunately, most rules have their exceptions. Gurcharan Das, a venture capitalist and former head of Proctor & Gamble India, is far more than a mere harvester of filthy lucre. The author of three plays, a novel and innumerable newspaper columns, Das is a writer whose subject is business rather than simply a businessman who subjects us to his writing.

The argument of Das's new book is straightforward: From Independence until 1991, the government of India strangled commerce and stunted the nation's economic development; now that the shackles of socialism are being loosened, India is poised for great financial success. It is an argument that might be considered settled fact in most boardrooms and seminar-chambers from Delhi to Dallas, but it could be an eye-opener to readers unfamiliar with the radical transformations currently under way in the subcontinent.

A decade of economic reform in India has created a cottage industry in works of academic analysis: Amartya Sen, Jagdish Bhagwati, Ashutosh Varshney, Lloyd and Suzanne Rudolph -- the list of scholars examining the phenomenon is long and distinguished. What Das brings to this crowded table is first-hand experience and a desire to address readers who may never have heard (or cared) about import substitution theory or the Licence Permit Raj. His book is partly a memoir, partly an economic policy primer, and partly a bracingly forthright rant.

By way of background, for 44 years India pursued an economic strategy from which it is now seeking to extricate itself. The goals of this plan -- crafted by the nation's first prime minister, Jawaharlal Nehru -- were primarily social: to provide all citizens with basic human necessities, to ensure that India remained economically as well as politically independent of foreign control, to narrow the gap between rich and poor, and to solidify the foundations of democracy in the sprawling, newborn state. These goals were remarkably ambitious, and (even more remarkably) they were essentially met. Critics of Nehruvian socialism point to the lack of rapid economic growth during the years when other Asian states were chalking up impressive trade figures. But this was never part of the plan. Das (together with many economists) argues that it should have been. Maybe so. Such arguments are easiest to make with 20-20 hindsight, and at the time Nehru was instituting his program the consensus among Western economists advising developing nations favored state-sponsored central planning rather than a free-market approach.

More to the point, India may not have been able to institute democracy and overhaul its economy at the same time. None of the Asian "success stories" did. Japan had its democratic constitution written and imposed by the occupying forces of the United States, which also supplied the massive funding necessary to build modern business infrastructure. South Korea, Taiwan, Thailand and Singapore have become true democracies only quite recently, long after their economic ascent. Indonesia, Malaysia and the Philippines are still wrestling (often violently) with the issue of popular rule. And can China, where 50 million people died in the man-made famines of the Great Leap Forward, serve as any sort of a economic or political model? Don't get me started.

Like many other observers, Das rails against the inefficiencies of the old Indian economy, and waxes ecstatic about the improvements in the decade of reform. As anybody who has tried to book an airline ticket or place a phone call in India can testify, it's a fair charge. Even today, there are plenty of offices (particularly in the public sector) that employ 10 people to perform a task incompetently instead of one person to do it well. But this was part of what made Nehru's plan function: In a nation now numbering one billion, barely half of whom are literate, it may have been the only substitute for enormous investment in social services. Most Indians would rather be employed in an inefficient economy than unemployed in an efficient one.

Yes, with democracy and national unity firmly established, Nehruvian socialism has outlived its usefulness. It was Nehru's own Congress Party that instituted the 1991 reforms, under Prime Minister P.V. Narasimha Rao. Even Jyoti Basu, the crusty old communist baron of West Bengal, has gone from trashing transnational conglomerates to pleading with them for investment capital. In arguing for economic liberalization, Das (whose leanings are conservative despite his criticism of the right-wing Bharatiya Janata Party's push for indigenous production) has set up a bit of a straw man. But for American readers accustomed to view India as a land of tigers rather than high-tech and maharajahs rather than microchips, this book will come as a welcome surprise. •

Jonah Blank is the author of "Arrow of the Blue-Skinned God: Retracing the Ramayana Through India" and "Mullahs on the Mainframe: Islam and Modernity Among the Daudi Bohras."

© 2001 The Washington Post Company

MISTAKEN MODERNITY: INDIA BETWEEN WORLDS.
By Dipankar Gupta.

A DECADE after discarding comforting but self-destructive ideals of self-sufficiency and economic planning, India is in the midst of a great debate about the consequences. The antis mourn two losses: dedication to equality and an approach to development that was distinctly Indian. They fear, in a word, that India is losing its soul. The pros revel in India’s new information-technology prowess, the unshackling of business, faster growth and the hope that it will reduce the country’s appalling poverty. They celebrate India’s reconditioned body.

"India Unbound" is by an unabashed pro, an ex-boss of the Indian part of Procter & Gamble who has moved into business consultancy and writing (he has done a novel and three plays). Thanks to economic reforms, he writes, "we have glimpsed paradise again and are on our way to regaining it." The author of "Mistaken Modernity", a sociologist at Delhi’s leftish Jawaharlal Nehru University, is an ambivalent anti. He does not condemn outright the reforms of 1991, which entailed deregulating business and opening India up (partially) to foreign trade and investment. Like many Indian sceptics, he is nostalgic for the days when production decisions "were tied umbilically to national development and sovereignty."

Gurcharan Das is correct that the umbilicus was strangling the baby. But there is less conflict here than it seems. Both sides in this debate are avowed enemies of what might be called old India, which remains in many respects the India of today. Its features include discrimination against women, caste barriers, Hindu chauvinism, official corruption, advancement based on patronage and, for business, profits without competition. Dipankar Gupta contends, justly, that India’s fascination with western gadgetry and lifestyles has not brought modernity. You can subjugate women and make a weapon of religion just as well with a mobile phone as without one, probably better. True modernity, Mr Gupta writes, entails adhering to universal norms, upholding individual rights, making the state accountable. His book pleads with India to put modernisation in place of "westoxication".

There is nothing here that true globalisers would not support, with enthusiasm. Their argument with the antis is really about money. Mr Gupta and others who are suspicious of reform seem to share the high-minded attitudes of India’s first prime minister, Jawaharlal Nehru, who once told J.R.D. Tata, head of the country’s most respected business house, that profit is "a dirty word". To take a more recent example, Arundhati Roy, India’s Booker-prize novelist, not long ago wrote a long and impassioned article in one of India’s weekly magazines portraying capitalists, especially foreign ones, as plunderers.

Mr Das, on the other hand, thinks that capitalism will cure many of the ills that Nehru’s socialism compounded. The cosy corruption of old Indian business habits cannot withstand competition, he suggests. Although the commercial bania caste was useful in kick-starting Indian capitalism, Mr Das points out that in a liberalised economy governed by rules rather than patronage, companies cannot afford to hire employees on the basis of caste. As for poverty, contemporary India’s worst blight, education will spread the benefits of economic growth to the masses.

One problem supporters of reform face is that its effects do not look very egalitarian, especially in an Indian context. Indians disagree whether the past decade of halting reform has reduced poverty. No one disputes that it has thrown up a vulgar, sharp-elbowed new middle class. Mr Gupta, with a tweedy disdain, has made its members the villains of his book, not without reason: many dodge taxes and welcome the stark difference of income that ensures an endless supply of cheap servants. Mr Das nevertheless concludes that "whether India can deliver the goods" will depend a great deal on this new middle class.

Despite its occasional repetitions, "India Unbound" is not only more persuasive but more enjoyable. Mr Das, whose career spanned the darkest and brightest eras in Indian economic policy, tells much of his story autobiographically. When he was manager of the Vicks VapoRub brand in India, flu epidemics posed absurd dilemmas: should he boost production beyond licensed limits (a punishable offence) or leave market demand unsatisfied?

Mr Das looks back to the rise of Indian business families, some of which often began with enterprising young men outwitting British monopolists, and offers management advice to their heirs, many of them now addled by decades of planning and protection. His real interest, though, is in the info-tech companies that sprang up in the 1990s. They are India’s chance to achieve the rates of growth and poverty reduction that East Asia accomplished through manufacturing, or so Mr Das and many other IT-besotted Indians believe.

Though Mr Gupta prefers sovereignty to success, he makes good observations about the grip of tradition. India’s tendency to throw up humanitarian heroes like Mahatma Gandhi and Mother Teresa is a sign of weak institutions, he believes: where these are stronger, saints are less needed to protect the weak. Women stand out in South Asian politics, he explains, because they are assumed to lack characters of their own and can take on the charisma of their (often martyred) husbands or fathers. All in all, however, his book relies too much on the author’s opinions and too little on his expertise.

Mr Das’s faith that IT plus education will restore India to greatness and prosperity can sound over-hopeful. And he mentions only in passing the urgent needs of agriculture, which continues to occupy two-thirds of India’s people. But his book is informative, entertaining, and basically correct about India’s need to embrace capitalism more whole-heartedly, for all the costs and risks.

Why the Subcontinent Is Subpar
Tunku Varadarajan

Mr. Das is eager to see India freed (or "unbound") from the trammels of such presumptions, as well as from the heavy statism that has been their result. And indeed, he sees some hope in the high-tech revolution of recent years. But in the main, he prefers to trace the evolution of India's economic misery, for which, he believes, its governing classes bear most blame.

Independent India's first prime minister, Jawaharlal Nehru, had, like the young Mr. Das, a low opinion of anything commercial. "Never talk to me about profit," he once scolded J.R.D. Tata, India's foremost industrialist. "It is a dirty word." This aversion to free enterprise can be attributed, in part, to a Brahmin's sense that money sullies the soul. Yet it was the product, largely, of a destructive fascination with Fabian socialism -- that is, the nonrevolutionary, British-born variety -- and of a blind admiration for the Soviet system of centralized economic planning.

Nehru, a sanctimonious snob who was never entirely able to treat his fellow Indians as equals, dragged his country down in the years after the British left. He imposed on India a complex of malfunctioning, state-run, industrial white elephants, all the while denying private entrepreneurs the right to seek investment from abroad, or to export without oppressive controls, or to import at will the materials and technology needed to establish competitive industries in India. Meanwhile, he neglected India's agriculture, forcing the country to rely on American food aid to feed itself while he blithely charted a pro-Soviet, anti-American foreign policy under the flimsy guise of nonalignment.

Mr. Das's book seeks to explain why India, a country once rich-or, at least, once a country of riches-is today largely impoverished. He ascribes some blame to the British colonizers -- and who would not? -- for the manner in which wealth was extracted from India but seldom, if ever, plowed back. But the strength of his inquiry lies in its castigation of those who inherited the running of India from the British. He is commendably scathing about Nehru and his daughter Indira Gandhi, who had her father's hubris and contempt for businessmen but not a trace of his erudition.

The period of emergency she presided over from 1975-77, during which many civil rights were suspended and political opponents jailed, is generally regarded as the ugliest chapter of postcolonial India. Yet Mr. Das, who ran Procter & Gamble India until his recent retirement, puts even that two-year phase in cold perspective: "Most people remember the Emergency because it represented a generalized loss of liberty. They do not understand that by suppressing economic liberty for forty years, we destroyed growth and the future of two generations."

In most developed democracies, someone like Mr. Das would be a legislator or a cabinet minister. Not so in India, where men like him – educated abroad, dressed in well-cut suits and convinced of the private sector's magic touch – are excluded from the political process. Indian politics is now riddled with castemanship, regional factionalism, personality cults and politicians solely intent on personal enrichment. (Mr. Das, a patriot in the best sense of the word, did indeed try to enter politics after he left P&G, but was given the cold shoulder by the major parties.)

The author regards economic growth as the only way to strengthen Indian democracy. One of his unsung men of mettle is Lal Bahadur Shastri, who succeeded Nehru and set in train the Green Revolution, by which India became a net exporter of food. Shastri's untimely death in 1966 paved the way for the ghastly Mrs. Gandhi. Another Das hero is Narasimha Rao, the prime minister who, in 1991, brought India its first truly meaningful package of economic reforms.

His other heroes are the Indian people themselves, who have flourished abroad in climes more favorable to free enterprise and who, in India, battle cheerfully against a system that, in spite of some reforms in the last decade, still does more to stifle enterprise than to encourage it. Mr. Das believes that the "information age" will be India's salvation. He is aware that nearly half of the country is illiterate. But his optimism is potent: "We have good reasons to expect that the lives of the majority of Indians in the 21^st century will be freer and more prosperous than their parents'. Never before in recorded history have so many people been in a position to rise so quickly." If he is right, India will soar with them. If he is wrong, it's back to the devil's own drawing board.

Mr. Varadarajan is the Journal's deputy editorial features editor.

Promise Emerges From a Nation's Tragically Mismanaged Past
SHASHI THAROOR, Special to The L.A. Times

No per-capita-income figures, no indices of calorie consumption, can capture the wretchedness that is the lot of the poor in India. Whether destitute amid the dust of countryside or begging on the sidewalks of its teeming cities, to be poor in India is to be born of a malnourished mother in conditions where your survival is uncertain. It is to survive with inadequate food, clothing and shelter, without the stimulation of learning or play; it is to grow unequipped intellectually or physically to be a productive member of a striving society. That such conditions afflict 350 million Indians is worse than a tragedy: It is a shame. It was in the name of India's poor that the Congress Party, which ruled India for all but three of its first 42 years of independence, sought to create a "socialist pattern of society" led by a state-controlled public sector that would dominate the "commanding heights" of the economy. This approach combined nationalism and idealism, seeing economic self-sufficiency as the only possible guarantee of political independence. It was less a strategy, however, than a reaction to the days of the British East India Co., which had come to trade and stayed on to rule. (One of the lessons you learn from history is that you often learn the wrong lessons from history.)

Gurcharan Das, a Harvard-educated businessman who has managed to run Procter & Gamble's Indian operations successfully while authoring three plays, a novel and a stream of newspaper columns, has seen Indian socialism up close and personal. When George Bernard Shaw famously wrote that "if all the economists in the world were laid end to end, they would never reach a conclusion," he clearly didn't have Das' book on the Indian economy in mind. Das weaves accessibly written history, thumbnail biographies of legendary Indian industrialists and entrepreneurs, his own experiences as a young executive building up the Vicks brand in the Indian heartland and accounts of Kafkaesque encounters with bureaucracy, into a book that traces "the struggle of one-sixth of humanity for dignity and prosperity" and comes to pretty clear conclusions.

Untangling the knots of India's democratic socialism is not easy. Because the assumption was that the public sector was good in itself, performance was not a relevant criterion: Inefficiencies were masked by generous subsidies, and a combination of vested interests--socialist ideologues, bureaucratic managers, self-protective trade unions and captive markets--made bad economics good politics.

Das is, in tempered and measured prose, scathing about this. The combination of internal controls and international protectionism gave India an economy hobbled by red tape, underproductive and grossly inefficient, making too few goods of too low quality at too high a price. Regulations made investment difficult and production beyond licensed quotas illegal. The resultant stagnation led to snide comments about the "Hindu rate of growth," averaging some 3.5% in the first three decades after independence, when countries in Southeast Asia were growing at 8% to 15%. The sector of the economy that grew most was neither the agricultural nor the industrial, but the bureaucratic; regulation became a more important economic activity than production. It is sadly impossible to quantify the economic losses inflicted on India over decades of entrepreneurs frittering away their energies in queuing for licenses rather than manufacturing products, paying bribes instead of hiring workers, wooing politicians instead of understanding consumers, "getting things done" through bureaucrats rather than doing things for themselves.

There is a certain poignancy in Das' story of Aditya Birla, establishing a string of successful companies in Southeast Asia because the impediments placed in his way by his own government made it impossible for him to invest in India. Conversely, Das tells us of Dhirubhai Ambani, a schoolteacher's son and former shipping clerk, who worked the system skillfully enough to build a petrochemical and rayon empire.

Das writes in an engaging style, sprinkling his text with a well-chosen array of quotations. There are layman-friendly discussions of economic theories of poverty, and his arguments are leavened with a close reading of economic texts, both classic and contemporary. But what shines through is the telling anecdote, the personal example, the remembered conversation. Only occasionally does Das let his restrained indignation run away with him, as when he writes that India had "too much democracy and not enough capitalism." Surely one can never have too much democracy, especially in a country of India's vast differences and disparities.

Having constructed a comprehensive indictment of India's economic failures, Das is optimistic about the liberalization that has opened the economy in the 1990s. He sees India on the brink of a great transformation, fueled by the Internet, that will rival Japan's after the Meiji Restoration. "Never before in recorded history," he concludes, "have so many people been in a position to rise so quickly."

A new Indian economy based on "globally competitive companies in software, Internet, IT-enabled industries, generic pharmaceuticals, and entertainment" is, he says, supplanting the old family businesses that had made their peace with the license-quota system. Das sees the emergence of "a new social contract of post-reform India where talent, hard work and managerial skill have replaced inherited wealth." Yet the reforms have yet to reach the poor: The market does not appeal to those who cannot afford to enter the marketplace. And Das overlooks the powerful forces of reaction, grouped under the banner of economic nationalism, that have united right-wing Hindu chauvinists with communists and socialists on an anti-foreigner, pro-self-reliance platform. Indian politicians, dominated by short-term expediency, looking hesitantly over their electoral shoulders and anxious to preserve their deniability should the reforms misfire, have not stood up for liberalization with either conviction or consistency. One hopes that Das' staunch optimism will infect India's political decision-makers, but it is an uncertain hope. For as Das himself acknowledges, the weakness of capitalism in India lies in the timidity of its defenders.

Shashi Tharoor is the author, most recently, of "India: From Midnight to the Millennium." His new novel, "Riot," will be published in the fall.

7) INSIDE TRACK:

Wisdom along the road to reform

By John Thornhill Financial Times; Aug 21, 2002

Unbounded enthusiasm about India has been in short supply of late. The horrific communal riots in Gujarat have reminded the world of India's volatility. The military stand-off with Pakistan has highlighted south Asia's diplomatic instability.

Nevertheless, Gurcharan Das, a former business executive turned author, is enthusiastic about India's prospects. While India may never roar ahead like the Asian tigers, he argues, it can at least advance like a wise elephant, moving steadily and surely, pausing occasionally to reflect on its past and to enjoy the journey.

The revised edition of Mr Das's book, India Unbound*, is at the top of the country's best-seller list for non-fiction, tapping into a vein of renewed self-confidence and national pride that is itself a central theme of his study. Part memoir, part history, part travelogue, part polemic, India Unbound dissects the failures of the country's Nehruvian socialist experiment and vividly describes the changes that are transforming the daily lives and outlooks of the country's 1bn people.

Mr Das's central argument is that India's market reforms, which began in 1991, are proving as revolutionary as Deng Xiaoping's embrace of capitalism in China in 1979 - it is just that they are occurring more slowly and have so far failed to generate as much outside interest.

In fits and starts, he argues, India's liberalising reforms are slowly unleashing the country's "animal spirits" and will eventually lead to its emergence as one of the world's great economic powers. By 2025, he predicts, India could have increased its share of global output from 6 per cent to 13 per cent, making it the third largest economy in the world.

An irrepressible enthusiast, who helped turn Vicks VapoRub into an improbable success story in India during his days as a manager for Procter & Gamble, Mr Das cites many reasons for optimism.

First, the dead hand of India's socialist economy - the so-called "Licence Raj" - is steadily being removed. This puts business executives, bankers, consumers and investors - rather than corrupt, licence-issuing bureaucrats - in charge of the economy, leading to the more efficient use of resources.

Second, political power is devolving from New Delhi to India's outlying states, encouraging competitive, local democracy and self-government. Better education and increasing literacy rates are drawing more of the lower castes and women into the political system, slowly improving the appalling levels of governance.

Third, a younger generation of Indians has cast off the colonial-era way of thinking and is embracing the opportunities offered by globalisation. While Indians of Mr Das's generation wanted to emulate Jawaharlal Nehru, post-colonial India's first prime minister, today's cult hero is more likely to be Bill Gates, Microsoft's founder. India's remarkable information technology revolution has helped create an elite cadre of business leaders that is now determined to drive further economic reform.

Mr Das argues that these changes have ensured that India's "Hindu rate of growth" - which condemned the economy to expand at an average rate of 3.5 per cent a year, from 1950 to 1980, scarcely more than the country's population growth - is now a thing of the past. In the 1990s, India's gross domestic product expanded at an annual rate of 6.3 per cent - and Mr Das predicts the economy has the potential to accelerate even more.

In an interview, Mr Das suggests that to do so, India's leadership needs to shed its damaging obsession with neighbouring Pakistan and learn more lessons from China's capitalist experiments.

"Ignore Pakistan, heed China," Mr Das says. "Pakistan pulls us down. China pulls us up. The best use of public money would be to take our legislators and show them what is happening in China.

"Mr Das argues that India's "curious historical inversion" - which resulted in it becoming a fully fledged democracy before it became a free-market economy - will always temper the country's economic expansion. But, he suggests, this is no bad thing: it will also help preserve social stability and the more fragile facets of India's unique civilisation.

"I would rather that we had a negotiated entry into the modern world with all our multifarious voices being heard than an autarchic system in which all voices are snuffed out," he says. "I would rather have 7 per cent [growth] with democracy than 8 per cent with autocracy.

"The central arguments of Mr Das's book certainly provoked a lively debate when they were discussed by a panel of distinguished economists in London earlier this year. Some speakers doubted whether the motor of India's IT industry would be strong enough to drive the economy uphill in the absence of a wide-scale, efficient and labour-intensive manufacturing industry, such as in China. It would be difficult to skip from an agricultural revolution to an IT revolution - as Mr Das suggested was possible - without passing through an industrial revolution.

Others questioned whether India's consolidated fiscal deficit of 10 per cent of GDP would not strangle private sector investment and hold back economic growth. The state retains a central role in India's economy and its functionaries would not easily yield their place.

But Amartya Sen, the Nobel prize-winning economist and master of Trinity College at the University of Cambridge, perhaps made the most telling critique, arguing that the deformations of India's democratic system would continue to bind the country, hampering economic reforms that still desperately needed to be pursued.

The "fascist elements" in the ruling Hindu revivalist Bharatiya Janata party (BJP) were dangerous proponents of reform, he said, favouring sectional over national interests. India lacked a secular rightwing party to champion liberal economic policies while the left was more divided by regional and caste loyalties than it was united by class interests.

This point was echoed by Lord Desai, a professor at the London School of Economics, who argued that it was India's balance of payments crisis in 1991 that drove market reform rather than any real ideological conviction among the political leadership.

"It is in no one's political interest to reform and the elite is so clever it can always give good reasons not to do so," he said. "India has a very unpleasant choice between secularists who do not want further liberalisation against non-secularists who are mildly reformist.

"Mr Das may be right that India has done well to jettison Nehruvian socialism, but his critics argue that the country's very future could be jeopardised by the BJP's seeming determination to overturn Nehruvian secularism as well.