(The Oxford Companion to Economics in India, Edited by Kaushik Basu, Pages 141 - 145, Oxford University Press, New Delhi, 2007)

It is to Joseph Schumpeter, the Austrian economist at Harvard, that we owe our contemporary use of the word “entrepreneur”. Schumpeter took an old word from the economics dictionary and used it to describe what he believed to be the secret of the capitalist system. Capitalism is dynamic and brings growth, he explained, because the entrepreneur introduces technological or organisational innovations, which bring new or cheaper ways of making things. These innovations create a flow of income, which cannot be explained either by labour or capital. The new process enables the innovating capitalist to produce at a lower cost, which raises his profit until other capitalists learn the same trick. Schumpeter's great insight was that this new profit does not come from inherited or God-given advantages but springs from the will and intelligence of the entrepreneur.

(Developing Cultures : Case Studies, co-edited by Peter Berger and Laurence Harrison, Routledge, 2005.)

Does 'culture' in some way help to explain the fact that the same Indian economy that was stagnating for the first fifty years of the 20th century began to grow at a respectable clip after 1980 and was amongst the fastest growing in the world by the end of the century?

(Paper Presented at a Conference at the university of Chicago 'India : Implementing Plularism and Democracy' on November 11 - 13, 2005. Forthcoming in a volume edited by Martha Naussbaum & Wendy Doniger)

A few months ago the confident and handsome friend of our son's gave a telling reply to a visiting Englishwoman in Khan Market in Delhi. “I am a Hindu, but”, he said, and he went into a winding reply about his beliefs. He hastily added that he was an Indian first. It was a perfectly honest answer, and any otherperson might have given a similar one about Islam or Christianity. But I sensed an unhappy defensiveness“ the 'but' betrayed that he might be ashamed of being Hindu.

India's ruling Congress Party led coalition genuinely wanted this year's government budget to help lift the poor and narrow the rich-poor divide, but it failed of course. Hidden in the budget, which the Finance Minister, P.C. Chidambaram announced on February 28 were two items that almost escaped notice. One was the provision to hire 200,000 teachers and the other was to give away 100,000 scholarships to schoolchildren. In the profoundly differing stories of these two numbers lies the answer to the question why every Indian government fails to help the poor. India's economic rise bewilders Indians.

When you have been teaching bad ideas to people for a couple of generations, they tend to catch up with you. This is poor Buddhadev's Bhattacharya's dilemma, as he attempts heroically to break with his desperate past. To begin with, he has to contend with the pervasive envy of peasant societies in places like Singur and Nandigram. Peasants believe that society's wealth is more or less fixed so that one person's gain must be another's loss. They view the social system as a zero sum game and it is hard to imagine that the overall pie may actually grow in a way that everyone will be unbelievably better off through mutual cooperation (by selling land, for example, to Tata's car factory).

India's mystifying economic rise bewilders Indians and baffles economists. No one quite understands why this noisy and chaotic democracy of a billion people has become one of the world's fastest growing economies. It is looking at a fourth year of consistent real growth of around 8% a year, following upon 22 years of very respectable 6% average annual growth. What puzzles economists is that India is not following any of the proven paths to success. Compared to the classic Asian strategy—exporting labour-intensive, low-priced manufactured goods to the West—India's economy is driven more by consumption rather than investment, its domestic market rather than exports, services more than industry, and high-tech rather than low-skilled manufacturing.

So, a new irony is upon us--the speed of trucks has risen 40 to 60 percent with good four and six lane highways, but we remain mired in the old inefficiencies of bad governance. A transport system is at the heart of global competitiveness, and for a country with the second highest growth rate in the world, octroi nakas are a huge drag. They also prevent India from becoming a common market. Municipalities levy octroi in order to earn revenues, but it is an inefficient and obsolete tax that has been phased out in all modern nations. Vijay Kelkar had held out the hope of eliminating octroi. He proposed sensibly that all indirect taxes should be merged into a single, universal Goods and Service Tax (GST). From this tax, municipalities would be compensated for the loss from octroi. Mr Chidambaram followed up by announcing that the GST would come into force in 2010. The nation took the historic step towards GST by enacting state Value Added Tax last year. Since there are huge legislative changes and negotiations required if we are to meet the 2010 deadline, the government shouldn't lose time and it should set up an Empowered Committee on GST in the coming Budget.

I was driving down from Jaipur to Ajmer. But I could have been anywhere. The six lane highway was a smooth beauty and the pot-holed India of the PWD was a hazy memory.   Then the wondrous colours of Rajasthan appeared and for an instant I thought I had entered a certain paradise, which seemed to unite modernity with tradition, world-class infrastructure with the ineffable loveliness of old India.