A study of economics reveals the ways in which choices are made – what resources are used, and who gets what in the bargain. By understanding economic theory, and by familiarising themselves with the economic history of the country, business managers can make more sense of the environment around them, and thereby make better business decisions.
A failure to appreciate the causes and effects of fluctuations in the economy will deprive business managers of the chance to obtain a clear perspective of what is happening in their markets, now or in the near future.
Economics has been described as a dismal science. Economic History is indeed the most dull and drab section in this science, which perhaps is the raison d’ etre for this rather uncharitable sobriquet of the subject. Nevertheless, a good knowledge of economic history is sine qua non for business managers to get a better insight into their commercial climate, so that they may evolve effective strategies to seize the right opportunities and thwart the lurking threats in the trade.
Two thousand years ago, India and the East Asian countries had almost 60 per cent share of the world economy. “Once there was an elephant called India who was rich, wise, and powerful and traded with countries in other continents and gave the world many new innovations.” Somewhere along the line, however, India and the East Asian countries seem to have lost out in the game and fallen from grace, which led to the rise of Great Britain, Europe, and the U.S.
But in the 21st century, history seems to repeat itself. India and the East Asian countries, like the Phoenix, are rising once again. Says the preface to the book: “… in East Asia there were rising tigers called Korea, Japan, Taiwan, Hong Kong, and Singapore who grew … and became rich, powerful, and relevant … India, the elephant, grew slowly and could not keep pace with the prowling tigers … Then, a big change came … one fine day, the world woke up to see that the elephant was not just large and grey, but had developed the tiger’s stripes.”
The subtitle of the book, “How the elephant earned its stripes” is, thus apt. The revival and rebirth of the Indian economy has been narrated in an easy, lucid, and eminently readable style.
The book opens with a chronological exposition of the economic history of India. Commencing from the influx of the foreign traders in the 18th century, the story unfolds vividly the evolution of the Indian textile industry, and the impact of the two world wars on the national economy.
The story proceeds further with a discussion about the financial institutions including “chit” funds and “nidhi” funds, besides talking about the role of family businesses in the burgeoning national economy. A separate chapter analyses the emergence of public sector undertakings.
As a country, perhaps, India does not have an aptitude and flair for being innovative, whereas Indians as individuals have earned laurels abroad for their innovative skills. Perhaps, the national track record is a throwback to the traditional and time-honoured agrarian culture; living off the land and settling in for a low-risk, low-reward way of life. But the book does address the imperative need for investment in R&D activities.
While narrating “the Indian story in modern times”, the book expatiates on the cooperative movement, self-help groups, business process outsourcing, and micro-finance as a macroscopic solution for poverty alleviation. A fast-track economy needs a robust infrastructure to expedite and sustain its growth momentum.
Economic infrastructure such as roads, railways, ports, airports, energy, and power comprise the engines of growth. Social infrastructure like education, health care, rural regeneration, and ethical corporate governance must move at an equal velocity to help attain this goal.
Towards the end, the book raises the basic question whether Indian economy — now poised at a tipping point — will move forward to dizzy heights of glory; or whether the roar of the elephant will turn into a whimper. The authors leave the readers in no doubt about the affirmative response to this query.
