BOOK REVIEW: The Turn Of The Tortoise by TN Ninan

BOOK REVIEW

 For: Mail Today

Title: The Turn Of The Tortoise- The challenge and promise of India’s future

Author: T.N.Ninan

Publisher: Allen Lane by Penguin India, 2015

Price: Rs.699/-

India Is Growing Despite Itself

All successful revolutions are the kicking in of a rotten door

John Kenneth Galbraith

A doyen of Indian business journalism, T.N. Ninan, has, in his very first book on India and its future, framed his densely reasoned arguments around one painfully colossal premise: ‘state failure’.

Ninan writes: ‘Since the principal failures so far have had to do with policymaking, regulation and sectors dominated by government companies, some important lessons must be drawn from the experience of the last six decades.’  He goes on to point out the basic problem: ‘The limitation is that private players can replace government companies, not government itself.’

His writing style is reminiscent of celebrated, if iconoclastic, ‘institutional economist’ and public intellectual, John Kenneth Galbraith.

 However Ninan is neither a free-marketer nor a statist. He takes the position that India will meet its powerful economic destiny because of its sheer size and ongoing growth momentum alone. ‘Tortoise’ is as much about sociology, politics, capital markets, manufacturing, corruption, as it is about economics.  

The Indian economy has been set in motion, post the reforms of 1991, suggests Ninan, and has grown to a size of $2.3 trillion over the last 25 years, and will, in the future, at 7% or 8% growth per annum, become the third biggest economy in the world, this inevitably, and sometime before 2040.

Ironically, this projected growth, running almost on auto-pilot, will continue to be predicated on relatively low wages, low per capita income, and sheer numbers in the working age population for decades to come.

Ninan does not think an imitation of China-like factories and SEZs will properly fit our bill. Instead he wants the country to build on its own successes, its own ingenuity and methods. He uses much of the book detailing the ‘snafus’ in both the government’s administration and the excesses/shortcomings of the private sector.

But, he does throw up a couple of great suggestions. He writes ‘The railways and posts are two of the largest government agencies responsible for service delivery. With 1.8 million employees between them, they account for over 50 per cent of the total 3.5 million employed in the civilian government’ at the Centre.  

Ninan suggests ‘hiving’ them off, and has other ideas, somewhat less doable, of how to make the rest of the government more ‘lean, purposeful and focused’. The railways and posts however, both losing money, are in the process of being reinvented and restructured in any case. They are ripe for at least partial privatisation, labour unions and the socialist opposition permitting, of course.

Meanwhile, a quarter century of relatively high growth, despite our horrific self-created inefficiencies, has produced a ‘possible class-break-up in India, 2014-15’.

Here, Ninan places 340 million in the ‘middle to rich class’ and exactly the same 340 million in the ‘poor’ category with ‘vulnerable non-poor and ‘aspiring neo- middle class’ accounting for 285 million people each in between.

The spending power allocations are; the poor earn Rs. 7,000/- per month per family, the vulnerable between 7,000-15,000/-, the aspiring between 15,000-28,000/- and the rich an amount greater than Rs. 28,500/-, per month per family.

The current category numbers will however realign dramatically assuming an overall population of 1.4 billion by then: 800 million will join the middle to rich category by 2025, underwired by a per capita income of $6,000/- in ‘adjusted dollars’ and ‘buttressed from below by a strong neo-middle-class’.

This will cause ‘markets for all manner of goods and services’ to ‘explode.’ The domestic car market could become the world’s 3^rd largest, along with aviation. 

Other market segments ‘will grow at sustained rates of 10-12 per cent, trebling in size over a decade.’ Housing construction, retailing, financial services will all witness dramatic growth.

And the result will force the inefficient state into retreat. And the power  will also shift from the Centre to the state capitals. Not bad then, for a tortoise left behind by the hares.

(651 words)

November 2^nd, 2015

Gautam Mukherjee