The Lost Decade (2008-18): How India's Growth Story Devolved into Growth Without a Story

by Puja Mehra

Before the global financial meltdown of 2008, India's economy was thriving and its GDP growth was cruising at an impressive 8.8 per cent. The economic boom impacted a large section of Indians, even if unequally. With sustained high growth over an extended period, India could have achieved what economists call a 'take-off' (rapid and self-sustained GDP growth). The global financial meltdown disrupted this momentum in 2008. In the decade that followed, each time the country's economy came close to returning to that growth trajectory, political events knocked it off course.

In 2019, India's GDP is growing at the rate of 7 per cent, making it the fastest-growing major economy in the world, but little on the ground suggests that Indians are actually better off. Economic discontent and insecurity are on the rise, farmers are restive and land-owning classes are demanding quotas in government jobs. The middle class is palpably disaffected, the informal economy is struggling and big businesses are no longer expanding aggressively.

India is not the star it was in 2008 and in effect, the 'India growth story' has devolved into 'growth without a story'. The Lost Decade tells the story of the slide and examines the political context in which the Indian economy failed to recover lost momentum.

Genres: Economics, India, Politics, Nonfiction, History

340 pages, Kindle Edition

Published April 18, 2019

Reviews

[Rishab Katoch · Rating 5 out of 5]

The Indian economy shrank 23.9% in the second quarter of 2020. While a lot of this can be attributed to the Coronavirus epidemic which saw India implement one of the strictest lockdowns seen anywhere in the world, the reality is the Indian economy was struggling even before the epidemic. Puja mehra's work chronicles India's economic history for the last decade (2008-2018) and how we ended up in the current mess.


Back in 2004, Indian economy was growing at an unprecedented rate of around 8-9%. This made India one of the most promising economies globally. This growth continued until the 2008 global financial crisis. But Indian economy was surprisingly resilient and soon showed signs of recovery. This is when a chain of events starting with the 2008 Mumbai attacks which forces the then home minister to resign and the UPA-2 government decides to hand the portfolio to the then finance minister P Chidambaram (who had been instrumental in handling the economy so far and was a darling of investors). The then prime minister and former finance minister Dr. Manmohan Singh was supposed to take additional charge of the finance ministry. This plan too failed as Dr. Singh had to undergo a sudden coronary bypass surgery. This resulted in the charge being handed to Dr. Pranab Mukherjee. His handling of the economy is ultimately what takes Indian economy off it's high growth trajectory which it would never recover from. Mukherjee' over stimulation of the economy leads to high inflation and his statist mindset brought many reforms to a halt. By the time Mukherjee is made President of India and taken off finance ministry the UPA -2 is rocked by a series of corruption scandals and the 2012 Nirbhaya rape case. This leads to a policy paralysis which prevents the government from taking many important decisions which would prove disastrous in the coming years including the NPA crisis in the banks.

The UPA is handed a resounding defeat in 2014 elections and the BJP with Modi at helm comes to power with the promise of economic growth. While in UPA era the problem was that India had a weak PMO and a strong cabinet (for instance PM Manmohan Singh unable to check Pranab Mukherjee and the policy paralysis). This saw an almost complete reversal with the new regime having a PMO so strong to the point where many decisions are made without even informing the cabinet ministers. The tensions between RBI and the government reach new levels leading to many high profile resignations most prominent being that of Raghuram Rajan. The strong centralising tendency and Modi's disregard for intellectual input leads to many disastrous decisions from demonetization to the botched up implementation of GST.

I would recommend this book for anyone interested in both the history and the challenges facing the Indian economy. It also provides an interesting insight into the conflict between good economics and political imperatives of a democratic nation and many behind the scenes glimpses of the people we elect to lead us. A fast paced read that touches upon a number of issues that India needs to address urgently or else the demographic dividend will surely turn into a demographic nightmare.

[Karthik Ram · Rating 5 out of 5]

A personal goal this year is to move beyond the headline - not let my opinions be shaped by 24*7 media. 'The lost decade' by Puja Mehra was therefore an excellent way to start the year. In the book, Mehra looks at the Indian economy from 2008 to 2018 (UPA 2 + Modi 1), drawing on her rich journalistic experience.

The two administrations were polar opposites - one had many advisors and little decision making; the other acts decisively with little patience for informed advice or advisors. The book goes to show that macro-economics is a complex subject that ought to be driven by subject matter experts, backed by decisive leadership. Think Rao-Singh '91.

Mehra's attention to detail, faithful reportage and analytical chops would do the heroes (imo) of the book - P Chidambaram and Raghuram Rajan, proud.
Content on taxation, agriculture and public sector banks (and the RBI), is particularly insightful.

One hopes the government of the day emphasises overdue institutional reforms, heeds expert advice and temporarily sets aside narrow political considerations. The next decade might yet be one of recovery.

[Abhishek · Rating 4 out of 5]

Please set your politics aside and read this story to understand how if there's a will at the top, the solutions can be found for the gravest of issues. But, unfortunately the politics will always trump economics, it doesn't matter who's incharge. That's the sad reality.

This book also focuses on how the power of unintended consequences of well intentioned policies shape the reality of millions of people.

At the end I felt really frustrated with the opportunity cost that our country has paid for some of the most spectacularly misguided decisions.

Very insightful!

[Mayank Dixit · Rating 4 out of 5]

A fine written book that talks about as to why the growth story of India in the past decade is not remarkable. You need to have a little knowledge of financial terms. But the minus is, the book just has been critical of the two governments without going into the success stories of the tenures. Overall a good written book.

[Sharath · Rating 3 out of 5]

I was torn between giving this book a 4 for the content and a 2 for the quality of writing and editing. So I ended up sitting on the fence at a 3. If I could... I'd give it a 3.5.

Puja Mehra has gathered very insightful material and organized it painstakingly to tell the story of what India has done right and wrong in the economic sphere during 2008-18. If you get through the whole thing without getting frustrated there is a lot to learn in this book - I certainly came out of it with a better appreciation of how the economic side of government and public bodies work in India.

Unfortunately, the book is let down by poor editing and a very unfriendly/jargon-heavy style. Some examples of poor editing: in successive sentences, the book refers to a value of 70,000 crores and 1.3 trillion. Both figures relate to India rupee amounts related to the same activity (different time periods). There are many passages that feel repetitive and could have been tightened up. And the space saved could have been used to demystify the jargon that is used liberally across the book. That would have helped make the book far more accessible for the lay person. I struggled in many places to understand the significance of some of the events described in the book without numerous Google searches on the side.

[nishanth · Rating 3 out of 5]

The author distinctively articulates the timeline and the events that led to the recent economic slowdown. The author also compares the governance model of upa and nda government highlighting both the positives and negatives of both the models.
One thing that from this book was how much impact a FM can have on the country’s future, maybe much more than the PM. But yeah Pranab Mukherjee with is pre-liberalisation mindset derailed the country’s economy growth and there by UPAs downfall. One surprising fact I learnt from this book was that when Pranab Mukherjee was FM in Indira Gandhis govt, Manmohan Singh was the rbi governor and 24 years later Manmohan Singh became the PM and Pranab Mukherjee still the FM. Damn that must have hurt him badly.

[Binit Agrawal · Rating 5 out of 5]

Rarely a book which lets you visualize the economy, feel it, understand it and watch it unfolding is authored. This book is one of those. It allows you to see the last 10 years of Indian economy as they unfolded. It tells you about the boom years up until 2010, the onset of pessimism during 2010-12, the comeback of reforms, the Modi wave and finally the last few years of recklessness. This book was written in 2018, and we can see its predictions come of age in Modi 2.0. Economics is not even part of the debate, the moderate counsel of Jaitley has been upended by the rashness and ugliness of Shah (both literally and figuratively). All in all, India of our dreams is lost. It's no more.

[Pranshumaan · Rating 3 out of 5]

The book is an alright account of contemporary economic history, but fails to maintain good tempo almost half way through. A lot of information presented is anecdotal, based on interviews with the same 3-4 people who keep reappearing. The bias towards UPA governments becomes palpable at times, although the author in general attempts to remain neutral. Suggest to be read more as a political account than an economic one.

[Les · Rating 2 out of 5]

I found some insights in this work, but for the most part it was repetitive and poorly edited. I found whole sections that repeated what had come earlier. It felt like many articles stitched together. There were some flashes of insight about the players, but it was a trudge. This could have been an exciting story about India's economic history.

[Chris Esposo · Rating 3 out of 5]

This is a challenging book to grasp for an individual not familiar with India’s internal politics and civil society, as well as at least a basic understanding of its economy from a standard sectoral decomposition standpoint. I have neither, and thus this book’s utility was les than it could have been as a reader. That being said, it is clearly written, and broadly understandable to a general reader, though because such a reader would not have much context to form cohesive memories around, the book would end up reading as a very long sequence of events from right before the global great recession of 2008 to the disastrous aftermath of Prime Minister Modi’s “demonetization” scheme.

Broadly speaking the book’s author has a few claims: 1. Both the Manmohan Singh/ Sonia Gandhi administration and the current (circa 2021) Narendra Modi administrations have failed India, but in different ways 2. The Singh/Gandhi administration failed not because of incompetence, but through lack of strong vigor/drive to push policies needed to provide sufficient stimulus during the recession, and nontrivial reform immediately after the crisis 3. Modi has failed through incompetence in both policy inception and implementation, epitomized by the haphazard deployment of “demonetization’, a sudden excise of certain low-denomination currencies, literally the night of the policy announcement during the day, in a vague attempt to eliminate corruption and reduce black-market transactions.

Because there’s literally no theoretical superstructure of India’s economy described in the text, an unfamiliar reader has no ability to independently validate (by principle or data) the assertions or the narrative provided by the author. The text really does read like a “by the hour” (or min in certain moments) description of how policies were debated and bickered on within India’s political system (often leading to lackluster results). Especially confusing to the uninitiated reader were the back-and-forth the two prime ministers had with various members of the Lok Sabha (India’s lower-house in the parliament). The text would have benefited immensely from a ‘dramatis-personae’ of the various parliamentarians and policy advisors.

What makes disentangling the truth even more challenging is that India’s internal politics may be as polarizing as the United States (possibly more so), so although this text seems to be “mostly” a “by-the-facts” sequencing of events, it clearly does take certain normative-stances on why certain things went wrong, and who was to blame. I don’t know if the reason for that is cultural, or political, and knowing this would make interpreting the text easier as one could attempt to ‘debias’ the narrative to the best of their ability given those known positions of the author and where they fall within the country’s political spectrum.

Overall, this book is clearly not meant as a first introduction of India's economy. It is a waste of time for those who have not yet read a ‘first’ (or a few) books on India’s economy/political economy. Unfortunately, there does not seem to be a standard authoritative economics text on India’s economy a la Gregory Chow’s text[s] on China’s economy. This text is definitely worth listening/reading, but only after these fundamentals have been learned by a potential reader. Conditional recommend

[Dr Timepass · Rating 4 out of 5]

Very well written with abundant data to back the claims. All factual information is rightly tagged and referenced to the sources. Most of the sources are news articles that can be found online so its easy for the reader to do our own fact check. There are parts when the reporting gets anecdotal with the author's personal accounts of interviewing the people involved. Although there are some nameless interviews that get us guessing.
She has done an incredible job with the chronology. While most reporting books out there go back and forth in time, Puja sticks to the timeline and hardly every confuses the reader. This book is readable by all, including novices who want to know more about the Indian economy.
The one thing I felt the book overindulged in was in the policy matter and politics. Though the central theme of the book is to say that great favourable economic opportunities were wasted because of mediocre handling of the office, it becomes a little confusing if the book wanted to talk about economics or politics. Ofcourse the lines between them are blurry, but one would expect a book to have clear distinction between the two. Lastly, Pranab da came off as a real big villian, in a very obvious way.

[Sri Raghavendra · Rating 5 out of 5]

I read this book after listening to an episode about this on a podcast. The author has analyzed the broken politics in the corridors of power in a fine fashion. In the early 2000s' we grew up with a sense of optimism in an India growing its GDP at 8% per annum with lofty goals of parity with China and ideas of a few mega cities competing with Shanghai.
Fast forward 2019 , if we look back in time and wonder where we dropped the ball , in trying to understand how decision making machinery functioned, this book provides a window for us to peep in to and see how decisions were made (or not made). I do get a feeling that the author is trying to separate so called “doers” from the “obstructionist” and try to pin the blame of most of UPA2’s failures on those non doers or obstructionists, while trying to absolve all the players involved . I may not fully agree to this point of view but nevertheless the author tries to bring about her point of view in a compelling manner and I appreciate the level of detail.
Read to know how not to repeat such policy paralysis in the future

[Eshan Sharma · Rating 4 out of 5]

The Lost Decade 2008-2018 by Puja Mehra

An informative, intriguing, and thought-provoking work on the recent history of Indian economics. India’s Former Prime Minister who is now side-lined, Dr. Manmohan Singh is often termed as the Hero of the 1991 economic reforms and again in 2008, under his leadership, India overcame the Global economic crisis. Now, under the new leadership in the Financial Sector, it seems hard and more complex to overcome the negative economic growth, when the establishment dreams of a Five Trillion Dollar Economy. Though, an opinionated book, The Lost Decade makes you think of how and when things went downhill for the Indian economy post-2008 crisis.

When the world is fighting with a pandemic, the poor policies of the state coupled with the mess in the unorganized sector and job losses in the organized sector, it is high time now when we must realize we need economists like Rajan and Dr. Singh to guide.

[Samantha Parkes · Rating 2 out of 5]

Just finished _The Lost Decade 2008-2018: How India’s Growth Story Devolved into Growth without a Story_ by Puja Mehra who describes in great detail how a series of bumbles including policy paralysis, political gamesmanship, monetary demonetization, and an ill-conceived and implemented goods and services tax (GST) slowed India’s economic growth. Taken broadly, it’s an attempt to explain why India’s economy is the way it is and maybe why India's economy hasn't matched other economies such as China (this is my thesis, not the author's). I don’t believe people with a rudimentary knowledge of India and economics are the target audience of this book. If you have a MA in Economics and intense familiarity with India, you will love this book. Otherwise, you might struggle, like I did.

[Mehul Sharma · Rating 3 out of 5]

A good to-the-point book which details government economic policies. The author seems to contradict herself in various instances such as calling a tax cut for industries and a fiscal stimulus as "Socialist". She also makes multifactorial events such as state election outcomes seem to be governed by single economic events. The book requires an understanding of basic economic and financial terms which reduces its layman-friendliness. It is however a must read for understanding the evolution of the factors that have led to the current economic crisis. It's also a good read for anyone interested in the relationship between the government and the economy.

[Univpurpose · Rating 5 out of 5]

A fantastic read for the objective minded

This is a fantastic book for those looking for an objective opinion of the two governments that have been in power since 2009. As someone who is financially aligned to see the country grow and prosper (hence forced to be objectively opinionated), the book gives me the feeling that it is well written, pretty much free of any biases and points are well argued.

Highly recommend the read.

[Ashish · Rating 4 out of 5]

The book takes the reader deep into the corridors of power and untangles how various policy actions (and inactions) moved India from a fast growth trajectory to a state of all round distress. The book tries to explain various events, decisions and their impacts in simple language without the use of jargons and from a neutral standpoint (relying on publicly available facts and information). Informative read, would definitely recommend.

[Abhishek Kher · Rating 4 out of 5]

A thought provoking unbiased book that is factual about the economic journey between 2008-2018.
It also present a beautiful global perspective to India's woes during this decade.
Pooja Mehra did a commendable job in interesting narration and putting forward a book for a reader interested in financial books or general reading alike.
Very interesting...

[Suman Srivastava · Rating 4 out of 5]

The content of this book is fabulous. The sad story of the mistakes that our leaders made on the economic policy front. The material could have been better organised through - interest level flagged at times.

[Gaurav Lele · Rating 4 out of 5]

Insightful and lucid tale of how successive governments have failed at getting the best out of India's demographic dividend by a combination of populist electoral politics, naive and simplistic solutions and sticking of the out of date economic models.

[Sourav Yadav]

Really really insightful book on the Indian economy from 2008 -2018. Although it put the blame on Pranab Mukherjee, may be she is biased against him but still a good read if you remove this particular blaming. Also she seems to be a sort of pessimist but her points should not be missed.

[Akash T · Rating 4 out of 5]

The book manages to present the failures of both the governments and the cause behind the failures on the economic front without taking any sides and that is a very rare phenomenon these days. The editing could have been better.

[Nallasivan V. · Rating 4 out of 5]

A must-read economic history of the last (lost) decade. Captures everything that has gone wrong in economic policy since 2009. The author's access to some of the key figures in UPA and NDA government makes this book quite insightful

[Rahul · Rating 5 out of 5]

Very informative book that explains economical issues well.

[Nidan Basheer · Rating 5 out of 5]

Stellar

[Vivek · Rating 4 out of 5]

Truly insightful, but depressing

[Soumya · Rating 4 out of 5]

Puja Mehra has attempted at creating a revealing yet contained piece of work that chronicles the riding waves of the Indian economy across the Indian political diaspora. A daring description of a decade !