In As far as research in develop¬ment economics goes, the present Indian scene is quite dismal. There cannot be more than three or four economists working in this country who have had any impact on the subject. I shall refrain from mentioning their names, not because I do not wish to give joy to them, but precisely because I want to give joy to many more. When a new book arrives in this bleak scenario, one naturally turns to it with great expectations. Mihir Rakshit’s book is unusual in that it lives up to these expect¬ations. It must, in fact, be one of the most competent works in economics written from India. The economy which Rakshit is considering is a dual one, with an advanced industrial¬ized sector and a subsistence sector which is primitive, with unorganized credit markets and some exchange occurring even in barter. This is not an unusual framework. After all, the models of Lewis, Jorgen-son and Ranis and Fei assume precisely these traits. There is, however, one important dif¬ference. In these standard works savings always equal investment; but Rakshit allows these two variables to differ ex ante.
July-August 1983, volume 8, No 1