Wealth of India, hits and misses

The Wealth of Nations is 250 years old. How Adam Smith would see India based on the economic vision he outlined in his classic work

- Duvvuri Subbarao

Inasmall pin factory in I8th-century Scotland, Adam Smith saw the secret to prosperity.

One worker drawing wire, another straightening it, a third cutting —together, producing far more than they would have had each of them done all the tasks themselves. From that simple observation emerged The Wealth of Nations, published in 1776, a work that continues to shape how nations think about growth, markets and the role of the State. Two hundred and fifty years on, India stands ata moment Smith would have found fascinating: A vast, ambitious economy balancing State intervention and market dynamism, global integration and inward caution. What would he make of it?

Smith would recognise something familiar in India’s journey. He believed prosperity came from productivity — what people could produce through cooperation, specialisation, and exchange. India's rise since 1991 reflects that logic, Markets expanded, entrepreneurs flourished, and millions entered a more connected economy. Digital public infrastructure— from payments toidentity —has widened participation in ways Smith would not have anticipated but would certainly have appreci ated. The spread of mobile connectivity and low-cost data has further deepened markets, bringing even small entrepreneurs into wider value chains.

Atthe heart of Smith's thinking was the idea of the “invisible hand”— that individuals pursuing their own interests, within a framework of competition and justice, can promote the broader good. But this is not an iron law. The invisible hand works only when markets are open and competitive, and when rules prevent manipulation.

That is where Smith's attention would turn to in India today.