O. V. MALYAROV. PUBLIC SECTOR OF THE INDIAN ECONOMY, MOSCOW: Institute of Oriental Countries, 2014, 360 p.

In the vast Russian and foreign research literature devoted to the development of modern economies in Asia and Africa, it is difficult to find a more popular and controversial problem than the public sector. Especially when it comes to the public sector of India, a huge country whose experience of diverse state participation in the economy using planned methods is important for understanding the problems of overcoming backwardness. The latest publication by O. V. Malyarov, a talented researcher and author of many works on the Indian economy, who has left us, makes a significant contribution to the discussion of a topic of theoretical interest and practical relevance. It should be noted that an important feature of all his publications is the wide use of Indian statistics, the best and most complete among all the countries of the South, which O. V. Malyarov knew very well and used professionally. As an example, I will mention the book "Independent India. Evolution of the socio-economic model and Economic Development", published in 2010, and, of course, a peer-reviewed work with an extensive and very useful statistical application in electronic form. This detailed factual material, organized in visual tables, helps to assess the challenges facing independent India and how to solve them with the participation of the state at different stages of overcoming socio-economic backwardness.

India began its path of political independence by inheriting a typical colonial economy - an agricultural sector with a huge overpopulation, a limited industry with little employment, an undeveloped service sector with a predominance of small and very small enterprises. In the book under review, O. V. Malyarov characterizes the economic situation in India in the late 1940s and the first years of independence as unambiguously difficult, while emphasizing the modest role of the public sector and the weak interest of national private entrepreneurship, especially in the development of industry (p. 21). The socio-economic indicators presented in the text reflect the realities of a post-colonial country, the existing dualism of the economic structure with a stable preponderance of traditional economic forms. The author emphasizes that the public sector employed no more than 1% of the amateur population, but at the same time it was based on infrastructure, transport and communications, which are important for the economy as a whole. Describing the state of the economy of India in the first years of independence, O. V. Malyarov comes to the conclusion that it is distinguished by "general dualism, "fragmented", and disintegrated economy", which was an inevitable consequence of the colonial period (p.23).

This duality, while still a typical feature of modern India, is slowly becoming obsolete and clearly demonstrates the persistence of traditional forms. Dualism, which is inherent not only in the economy, but also in the society of most countries of the Afro-Asian region, plays a special role-it helps the poorest strata of the population survive and at the same time hinders the formation of modern economic and social institutions. It is a pity that the reviewed work does not reflect the diversity of the informal sector in India, which has a strong impact on the economy as a whole, especially on the labor market. According to the calculations of Indian sociologists, up to 90% of the labor force in India is employed in this sector.¹ Due to the weakness of the modern banking system in India, as in most developing economies, the position of usurers, especially in rural areas, who lend money to farmers against future crops, remains. There are cases of farmers committing suicide in a number of Indian states due to falling prices for their products and the inability to repay debts to loan sharks.

The main positions of the author of the reviewed work, O. V. Malyarov, and the detailed factual material he drew on help answer the question of why India, from the very first steps of political independence, chose the path of increasing the role of the state in economic construction in the middle of the 20th century. In this context, it is important to highlight some features of India's institutional environment. With all the gravity of the British colonial-

¹ Marjit S., Kar S. The Outsiders: Economie Reform and Informal Labour in a Developing Economy. New Delhi, 2011. P. 1.

His legacy in India was the institutions that formed the foundation necessary for building a modern economy. British law, which was based on the recognition of the right to private property, and the legislative system protected this right, as well as the owner, with all the flaws and amendments to local specifics. Equally important was the educational system, including the few institutions of higher education established in India, which trained national cadres to work primarily in local administrative services. Of course, the British colonial structures were interested in them. But by the time of independence, India had trained local officials. The current Indian Administrative Service, with all its strengths and weaknesses, is a direct extension of this system. It also inherited the previously created statistical base, which made it easier to prepare the first five-year plans.

Unfortunately, it is not always taken into account that India has developed an educated national elite, familiar with the economic and technical achievements of advanced Western countries, focused on promoting their country to economic independence after the main task of the previous period was solved-achieving political independence. And it is to her credit that India has preserved English as an official (not state) language along with numerous national languages in the states, creating real advantages for the country when the rapid development of information and communication technologies began in the world economy.

There is another aspect that is important for understanding the development philosophy that was inherent in the political leadership of India, or at least a significant part of it. In the literature on developing countries, the Comprador bourgeoisie was often mentioned in the early stages of Development Studies, with a negative assessment of its cooperation with foreign capital. But there was no other way to grow the economy and create a national industry, since equipment, experience in its use, and management methods could only be purchased and mastered in cooperation with foreign, in this case mainly English, capital and entrepreneurship. This is how local entrepreneurs laid the foundations of modern (by the standards of the XIX century) industry in India, supplying finished products, including for export. It was a kind of market training, the formation of market memory, necessary to move the country to new technical achievements. In the study of the formation of Western civilization and the spread of its influence, it is noted that, despite the weakness of Indian entrepreneurial capital, at the end of the XIX century. construction of industrial enterprises has accelerated: "Since the 1880s, the factory industry in India has become a reality. Textiles, both cotton and jute, became the first important branch of modern industry, followed by metallurgy (steel industry since 1913, aluminum industry since 1944) and other industries"². Indian industry, although limited in terms of nomenclature and scale of production, mainly met domestic demand, which was low due to mass poverty, for light industry goods. After independence, this enabled the national Government to sharply restrict the import of such products, thus saving resources for importing heavy industry equipment.

The growing influence of the state in the economy, the formation of the public sector, as shown by O. V. Malyarov, was directly related to the position of the first head of the government of independent India, Jawaharlal Nehru. In the mid-1950s, much was written about his commitment to socialism, partly embodied in official documents of the ruling Indian National Congress (INC) party. It was a kind of tribute to the time and idealism that was inherent in J. R. R. Tolkien. Nehru and some other leaders of the young states of Asia and Africa. In reality, we were talking about state capitalism in backward economies that were trying to find their place in the then complex bipolar world. In these circumstances, O. V. Malyarov's position is reasonable: "Strengthening the role of the state in the economy and the emergence of the public sector are not the prerogative of socialism alone and are by no means alien to capitalism" (p.35). I believe that the Indian economy is developing within the framework of this paradigm with certain features generated by national, historical and cultural traditions.

A reflection of this complex complex in India's economic policy was the choice of gradualist tactics, an attempt to avoid abrupt transitions and breakdowns, which could have extremely negative consequences.

² McNeil W. Ascent of the West / Translated from English. Kiev: Nika-Center Publ., 2013, p. 996.

severe consequences in a huge economy with millions of poor people. The Government established the "rules of the game" and maintained them, creating a certain predictability necessary for the functioning of the internal market and its actors. Such a vector was the industrial policy resolutions of 1948 and 1956, which delineated the spheres of public and private entrepreneurship. The state reserved the basic sectors of the economy for itself, leaving mainly light industry to private initiative. In the documents concerning industrial policy, it was emphasized that " the division of industries into different categories does not mean their complete isolation. There will be not only an area of overlap between the industries of the two sectors, but also a great interconnection" (p. 47). Thus, the foundation of the economic policy was laid, which much later became known as public-private partnership and became an integral part of India's five-year plans.

This form is widely used in the construction of large infrastructure projects that require long-term massive investments. Table 4 clearly demonstrates the ratio of average annual investment in the economy of the public and private sectors from 1951 to 2012 (p.55). The state's share exceeded 40% of all capital investments in the second, third and fourth five-year plans, which were critical for the construction of heavy industry enterprises. The contribution of large private capital gradually increased, recognizing the importance of strengthening the industrial base in its own interests. The federal Government supported the construction of state-owned enterprises in the states, considering it necessary to strengthen local industry. The specifics of most enterprises in the United States were constant unprofitability, since " prices and tariffs for their products were set at a low level, often not recouping costs." It is difficult to agree with O. V. Malyarov's position that this was "the result of supporting consumers of their products, promoting the development of certain sectors of the economy..." (p. 103). Such goals were set, but either were not implemented, or required additional funds. Low efficiency is typical for most state-owned enterprises in India, but unfortunately, this problem is not given due attention in the book. There are many reasons, including excessive employment, unprofessional management, and chronic corruption. The result was the constant subsidization of state-owned enterprises from the budget.

Although from the point of view of classical political economy, state regulation in any form is an infringement (restriction) of the rights and, I would add, initiatives of private entrepreneurship, within certain limits and at different stages it meets the long-term interests of the country. Licensing has become such a constraint in the Indian economy. Any change in the product range, attraction of additional capital, purchase of imported equipment, etc. required applying to specialized state institutions. This not only fueled the corruption of officials at all levels, but also hindered the entrepreneurial initiative. As the liberal reforms of 1991 showed, the removal of the most severe restrictions imposed by the "license realm" on the private sector helped significantly boost India's economic growth. But such a breakthrough was made possible as a result of several decades of efforts to change the structure of the country's economy, renew it through partial modernization and the creation of modern production facilities.

It must be admitted that at the early stages of the formation of India's economic policy, state intervention in the market element was not only natural, but also objectively necessary. There was no other mechanism to meet the country's long-term needs. At the same time, the government tried, as far as possible, to take into account the positions of private business, trying to avoid confrontation with it, which is dangerous for the country as a whole, and recognizing its positive role in the economy. Despite the weakness of national entrepreneurship, it actually creates mass employment, including widespread traditional small businesses.

Nationalization as a method of expanding State ownership was limited in India. The infrastructure facilities owned by the colonial administration, due to their special economic role, could not be privatized for political and economic reasons. They automatically became the property of the national government. As Professor N. M. Khryashcheva rightly pointed out in the introductory article to the peer-reviewed book, the government set the task of developing the private sector not by "privatizing state-owned enterprises (which does not create new capacities), but by supporting the creation of new capacities in the private sector" (p.9). Later, for various reasons, some industrial enterprises were nationalized, for example:

coal mines in 1973 and 1975 (p. 203). Nationalization in the credit and financial sphere was fundamentally significant, as a result of which the country acquired a state regulator of monetary circulation, the Reserve Bank of India, and thus a mechanism for centralized monetary policy was created. Nationalization was limited in nature, and the interests of entrepreneurs were protected to a certain extent during the formation of the public sector in this way. The owners of the nationalized enterprises were compensated, although below their market value. Among the existing enterprises, there were many unprofitable, technically outdated ones that were unprofitable to turn into state ownership. This experience is instructive and can serve as a warning to fans of revolutionary measures in the economy. One of the lessons of the socio-economic policy of independent India is not to oppose the private sector to the public sector, but to create conditions for their coordination.

At the same time, the practice looks much more complicated. The emphasis on the public sector-its stimulation in various forms, primarily priority financing-has led to a certain infringement of private entrepreneurship. Planning has been focused on the construction of new enterprises in the public sector through centralized financing, starting with the first five-year plan of 1951-1956. We must pay tribute to the courage of the Government of India, which decided to start planning in the face of the most difficult economic situation, aggravated by the division of the country. Although government spending was limited for objective reasons, it focused on the development of economic and social infrastructure, which was beyond the capacity of the private sector. In the future plans, a certain place was given to state incentives for the private sector in order to modernize it, as well as expand the country's industrial base.

Accelerated industrialization based on an import-substituting model has become a landmark event in the history of independent India, a necessary stage in the creation of a modern economy. At the same time, during this period, as often happens during the policy of import restriction, its concentration on a narrow group of goods for the formation of heavy industry, the competitiveness of products produced in a protected domestic market declined, and the country's position in the world economy did not grow. The growth of the public sector did not solve and could not solve the problem of employment - one of the most "viscous" and fraught with serious social and political upheavals. By the early 1990s, the number of public sector employees had tripled from 1960, reaching 9.6 million (p. 78). If we compare this figure with the number of unemployed, 40 million people, and their registration is incomplete, unemployment in rural areas remains almost out of official registration, then it is obvious that the public sector has not been able to become a generator of employment. It is significant that at the general parliamentary elections in May 2014, the creation of new jobs was a priority promise of almost all candidates for deputies.

In the late 1980s. India has been described as a reluctant globalizing country. The strengthened private sector was increasingly constrained by government regulation. A certain isolation of the country, which sometimes reached the level of autarky, hindered further development. The cumulative pressure of these factors has pushed the Government to implement liberal reforms. It was necessary to overcome the unprofitability of state-owned enterprises, increase the competitiveness of their products in the foreign market, and accelerate the formation of a modern service sector, for which engineering and technical personnel were trained who left the country due to lack of work.

These were the objective conditions for the transition to an export-oriented model of development, embodied in the reforms of 1991, focused on the openness of the economy and increasing the independence of public sector enterprises. For example, in the first years of the reforms, 696 out of 867 official instructions regulating their work were abolished. State-owned enterprises were allowed to issue securities for sale on the country's stock market in order to increase their capitalization and expand production (p. 117). The autonomy of the largest State-owned enterprises, which were granted the right to appoint non-government employees to their boards of directors, was particularly significantly increased. The government's statement on industrial policy of July 24, 1991, one of the first in a package of liberal reforms, which allowed public sector enterprises to sell part of their shares in order to "give more market discipline to the functioning of state-owned enterprises" (p.119), is significant. In essence, it was a recognition of the role of the market in increasing competitiveness.-

public sector entities. The scale of share sales by state-owned enterprises during the reform years is well illustrated in table 33 (pp. 122-123). It is a pity that the author only brought the figures up to 2007/08, since it is known that the process of corporatization was on the rise.

Recognition of the expediency of privatizing state-owned enterprises in the event of their chronic unprofitability ("sick" enterprises in Indian statistics) can be considered a landmark phenomenon. This is the position of the United Progressive Alliance coalition government based on an agreement between the two national parties, the INC and the Bharatiya Janata Party (BJP), which shared power after the 2004 elections when Manmohan Singh became Prime Minister. The distinctive features of the reforms were the growth of the private sector, its activation in the domestic market and abroad. In the first years of the 21st century, large private companies in India, primarily the holding headed by Ratan Tata, were aggressively involved in international mergers and acquisitions.

Deep knowledge of Indian problems gave O. V. Malyarov the opportunity to note such a specific feature in the implementation of public sector reform as de-investment. This, as the author notes, does not mean privatization, transfer to private ownership, but the possibility of selling shares of a state-owned enterprise, but with the condition that the government's share "will not be reduced to less than 51% and the government will retain managerial control" (p. 160). This procedure was carried out for each state-owned enterprise separately, which was stipulated in special government documents. (See Appendices 8 and 9 for details of enterprise deinvestment for 2005-2010.) These measures were aimed at strengthening market mechanisms in the economy, although the official role of the State was still recognized as leading.

In the course of the reforms, the government tried to implement measures to revive chronically unprofitable companies. Some of them were transferred to state ownership in order to avoid an increase in unemployment in the event of their closure. However, the procedure for such a transfer turned out to be bureaucratically complicated, requiring lengthy approvals, and as a result, no more than 64 enterprises passed it in 1992-2001 (p.165). Of interest are the government's measures to reduce the excess employment typical of state-owned enterprises, a topic that is extremely complex and relatively poorly studied in Russian indology. As O. V. Malyarov writes, "central government enterprises guarantee their permanent employees lifetime employment" (p.169). Labor market rigidity is consistently featured in negative assessments of India's investment climate from the point of view of foreign private capital and large local businesses. At the same time, excessive employment is constantly mentioned as one of the reasons for the low efficiency of state-owned enterprises. Therefore, since the late 1980s, voluntary redundancy programs with certain compensations, retraining and new employment have been offered. These data show a 15.4% decrease in employment at state - owned enterprises in 2003/04-2009/10 from 1,762 thousand people to 1,491 thousand. During the same period, the average annual salary per employee increased from 248-481 rupees to 609-816 rupees, i.e. more than twice (p. 172). Whether this was due to increased labor productivity or mainly inflationary pressures, unfortunately, this topic is not disclosed.

As for financial investments in state-owned companies, which are discussed in detail in the book, the main share of them falls on industrial infrastructure and the service sector (p. 191). Electricity and transport are particularly important, as India's economy is constantly lagging behind these industries. It is enough to recall the power grid accident in 2012, when over 600 million Indians were left without electricity, difficulties in moving goods and people inside the country due to poor quality and congestion of major highways. Such financing meets the interests of the entire economy's development.

India has not been able to reduce its dependence on imported hydrocarbons, and its domestic capacity in this critical sector is limited and mainly related to the development and production of coal. I would like to see India move forward in the use of unconventional energy sources, but this topic remains outside the scope of the peer-reviewed book. Among the industries that have achieved significant success with state participation, the young pharmaceutical industry deserves attention. Its products based on the use of traditional Indian medicine and modern methods are in high demand on the world market, including in Russia. This has been one of the reasons for India's success in healthcare, which in turn attracts foreign tourists.

It is a pity that the book does not summarize the results, although O. V. Malyarov's position is, of course, clear. His passion for the topic, confidence in the state's ability to solve the most difficult problems.

complex socio-economic issues are felt throughout the book under review. It is interesting and useful from the point of view of the statistical material used, but I would still like to see a more balanced approach to the role of the state. Its role is great, but it changes at different stages of the country's development. After all, the experience of India itself shows the need for flexibility and taking into account the variety of factors that determine the country's development. The dynamism of the world economy, both positive and negative, and the pressure of the demonstration effect accelerate shifts at the national level. India's difficult situation, the decline in industrial production, and rising inflation persistently require new solutions. This was clearly confirmed by the results of the parliamentary elections in May 2014, which ended with the victory of the BJP. The new Prime Minister of the country, Narendra Damodardas Modi, in one of the first speeches announced the preparation of a package of reforms. In other words, about the upcoming changes.

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