Tuesday 15 July 2014

Pullarao Pentapati - Is Prime Minister Modi Keeping Foreign Economic Advisers at Distance

Prior to the elections and the assumption of office by Narendra Modi, there was talk that he was a willing recipient of advice by diverse foreign-based economists.

Prominent among these names were Prof. Jagdish Bhagwati of Columbia and Prof. Arvind Panagariya. The former London School of Economics Professor Lord Meghnad Desai was also viewed as a potential economic adviser. There were many other names too.
Pullarao Pentapati

In fact, so confident were these foreign economic advisers that they participated in debates on how they would actually run the economy. It became so intense that there were two camps, namely the Dr.Amartya Sen camp and the rival Dr. Jagdish Bhagwati camp.  In fact, Dr. Amartya Sen posed as if he was the godfather of the UPA government and how he was mentoring them in response, The Bhagwati camp posed as if Narendra Modi was their disciple and they were teaching them economics. This might very well be true. But right now, things are not tuning out that way.

In the USA, academics advise important politicians and it is done openly. The American and western European culture allows politicians to say that economics or science are too complicated and they happily turn to advisers. But in India, the political egos are so fragile, that our leaders can never admit that they depend on someone for advice.

In fact, Prime Minister first honored an economist who was totally India-based. Dr. Bibek Debroy has been working in India and seems devoted to development here. He also seems to be grounded in some realities here. Prime minister released a book edited and partially authored by Dr. Bibek Debroy.

It might be that the foreign-trained NRI economists were too loud in their advocacy. It might be that Narendra Modi met them or listened to them. This might have given wrong signals. Or it might be that after becoming Prime Minister Narendra Modi realizes that such economists and experts must be listened to, but from a safe distance.

The other issue might be that the foreign-economists are used to the open and loud style of American economic advisers. But such a culture is alien to India. In fact, Dr. Amartya Sen, ever since his retirement from active teaching at foreign universities, has been spending a lot of time in India. Though the UPA government referred to him many times, there was no institutional position for him.

Similarly, Prof. Jagdish Bhagwati and his co-economists were also highly visible in the Indian media. But after Shri Narendra Modi assumed office, there has been little visibility of them. Definitely, during the budget consultations, there was no mention of such foreign –based economists.

It might be too early to say such foreign economists will not have an official or visible role.   But anything can happen in India. We only have to remember how a Shri Raghuram Rajan, Business  School Professor from the University of Chicago is now the Governor of the Reserve Bank of India.

But right now, there has been no visible role for foreign economists in the new Modi government in India.

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