Mukherhee's book has been shortlisted for the 'Novel Award' category for the awards that will be announced on January 5 in the UK, publishers Penguin Random House said in a statement today.
The overall Costa Book of the Year is set to be announced on January 27.
Mukherjee's book, his second novel, had been shortlisted for this year's Man Booker Prize but was pipped by Richard Flanagan's "The Narrow Road to the Deep North."
The 44-year-old London-based author, who had been educated at Oxford and Cambridge universities is drawn upon the Naxalite movement of the 1960s and unfolds a family history.
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The novel includes the limits of empathy and the nature of political action, it asks-- how do we imagine our place amongst others in the world? Can that be reimagined? And at what cost?
Mukherjee's first novel, "A Life Apart" (2010), won the Vodafone-Crossword Award and the Writers' Guild of Great Britain Award for best fiction. It was also shortlisted for the inaugural DSC Prize for South Asian Literature.