Quiet Crisis in India. John P. Lewis. Faber, 41s. 6d

Quiet Crisis in India is a curious title for a rather complacent, if competent, book by an American Liberal in which he expounds with sympathy the strategy of Indian economic planning. Lewis explains the theory underlying the Indian Five Year Plans and restates in non-technical language the very useful discussion which took place in the fifties on the subject of investment allocation and technological choices; and he makes some valuable points in this context. He shows the emphasis on the development of heavy industry in India to be a rational choice and not incompatible with a simultaneous emphasis on agriculture for ‘the two strands of the total programme are not just largely non-competitive; they are complementary’. Although Lewis makes a promising beginning on the subject of agriculture and the transformation of the rural economy when he emphasizes at the outset that the problem here is ‘primarily an organizational one’, he does not come to grips with this vital problem. This is because he fails to grasp the core of the organizational problem—that of the transformation of the rural social structure. While acknowledging some shortcomings of the Congress land reform, he does not consider at all the significance of the new hierarchical structure of the rural economy which has now been established—dominated as it is by capitalist farmers who have the bulk of the land and produce an increasing marketable surplus, while the vast mass of the peasantry sinks ever deeper into bankruptcy (cf. Sulekh Gupta on ‘The Agrarian Situation in India’ in Seminar issue No. 38—reprinted in Revolution Vol. 1 No. 6). Discussing the outlook for domestic and foreign private enterprise, Lewis reminds the business tycoon that ‘Part of this new “pragmatism” (in India’s industrial policy—h.a.) simply re-states the fact that the private business community, whatever the rhetoric of the moment, always has been substantially represented within the Nehru Government and the Congress Party. The party continues to be dependent financially upon major industrial contributors . . . ’ Lewis suggests that ‘the dichotomy between the private sector and the public sector is an unsatisfactory framework for analysing the prospects for Indian industrial organization’ and points to the ‘various admixtures of public and private components, both in organization of particular firms and in the composite organization of whole industries’. He adds ‘Foreign private enterprises, in particular, if they wish to explore the full potentials of the Indian market and, in doing so, to maximize the Western contribution to the Indian development process, must be prepared to experiment with what may be, by their home-country standards , rather novel mixed alliances.’ The most remarkable feature of course of India’s ‘socialistic pattern of economic development’, which Lewis barely touches upon, is the vast extension of the interests of Western (and in recent years mainly us) oligopolistic capitalism in India, either independently or in association with ten Indian monopoly groups which completely dominate Indian capitalism. These have not merely acquiesced in the extension of the public sector but have even encouraged it, for it directly serves their interests. They have established a ‘partnership’ with public enterprise. The other important feature of Indian economic development, which Lewis does not mention at all, is the increasing disparity in income and wealth—created by India’s ‘democratic path’ to economic development—leading to a situation in which increase in production is devoted neither to the creation of investment goods and the expansion of the capacity to produce nor to support the consumption of the masses which is declining. It is absorbed instead by the conspicuous consumption of a small section of the community, whose privileges grow faster than national resources. Hamza Alavi