It is a month since the macabre dance of death in New York and Washington and we are now in the midst of a war, but I am not sure that we understand what this is all about. People around the world are uncomfortable and insistently ask whom is America fighting? Americans are also confused. They want to know who are their enemies and why do they hate us? And hate so much that that a few young men defied the instinct to live and died for it. The trouble is that America is at war against people it doesn't know, and having gone off to war, it can't very well return without having won it.

The truth is that a decade after the reforms most Indian companies are floundering. With a couple of dozen exceptions the vast majority has failed to become truly competitive. Our companies have still not acquired the confidence or the skills to succeed in the global economy. Most continue with a “factory mindset” when the industrial age is disappearing. Most sell cheap, shoddy products.  

In India Unbound I wrote about how India embraced democracy first and capitalism afterwards and this had made all the difference.1 India became a full-fledged democracy in 1950, with universal suffrage and extensive human rights, but it was not until 1991 that it opened up to a freer play of capitalist forces. This unique reversal, I think, explains a great deal about Indian society today, and particularly why the pace of reforms is so painfully slow.

Medha M. Kudaisya, The life and Times of G.D. Birla, Oxford University Press, New Delhi, 2003, 434 pages, Rs

Owning a dynamic, indigenous entrepreneurial group like the Marwaris would seem to give India a competitive advantage in the world economy, yet the Marwari has never quite won the respect from Indian society that he has yearned for. Most Indians know him as the furtive shopkeeper around the corner. Like the Jew in old Europe he is the moneylender of last resort, who charges extortionate interest and dispossesses widows of their land and jewellery when the loan is not repaid. Or he is perceived as the ruthless tycoon who did not stop at anything, including the pre-empting of licences during the hypocritical forty years of the Licence Raj.