The Daily Fix: Arvind Subramanian’s exit further depletes government’s bank of economic expertise

The Big Story: Economy of thought

Arvind Subramanian on Wednesday quit his position as chief economic advisor to the Centre a year before his term ends, citing “personal reasons”. As he departs for an academic postion in the United States, the economist said the position with the Indian government was the best job he ever had, though it was not without controversy. Subramanian is the third well-known economist to leave a government post and head back to academia. In 2016, Raghuram Rajan resigned his position as Reserve Bank of India governor as the government did not offer him a second term in the central bank. In 2017, Arvind Panagariya quit as head of Niti Aayog. Subramanian’s exit adds to a worrying trend of the government losing economic talent, of being unable to retain experts attacked by Hindutva forces.

The controversies that Subramanian alluded to may include his comments in 2016 pointing out that the manner in which the government reacts to social divisions has a major impact on economic growth. He had also said that if he shared his opinion on the government’s beef bans, he would lose his job. Subramanian as well as Rajan had been accused by BJP member of Parliament Subramaniam Swamy of holding “anti-national views”. Meanwhile, Panagariya’s proposals at the NITI Aayog, which included disinvestment and measures to enable women to work at night, were criticised by affiliates of the Rashtriya Swayamsevak Sangh. Panagariya’s successor (an Oxford alumnus) described the Columbia professor’s departure as the fading out of foreign influences on Indian economic policy.

After leaving the central bank, Rajan, for one, has been openly critical of government decisions such as demonetisation and the trend of populist nationalism. It remains to be seen whether Subramanian follows suit but, right from the start, he was regarded as a dissident who had been accommodated in government. His departure means the loss of that vital critical voice in the corridors of power, someone with the ability to question the government’s more populist urges.

Subramanian’s departure comes at a time when the political system needs an injection of expertise to formulate economic policy. The years post 2014 have been crammed with changes, but they do not compared well with the reforms post 1991, which were instrumental in constructing India’s growth story. Many put down the earlier generation of reforms to the government’s ability to employ policy experts, mostly lateral entries without any political background, who worked within institutions such as the Planning Commission and the Reserve Bank of India for long periods of time. If India is to draft vibrant economic policy to keep pace with the times, the government needs to find ways to develop expertise within the ranks of the bureaucracy – by providing adequate training to members of the economic service, for instance – and by retaining lateral entries, even if they do not agree with the reigning political agenda at times.

The Big Scroll

Rohan Venkatarmakrishnan asked why an economist like Arvind Panagariya chose an academic job over a government post.

Mayank Jaain on how Raghuram Rajan managed to redefine the role of RBI governor.

Punditry

1. In the Indian Express, Firdous Tak, a member of the legislative council in Jammu and Kashmir and a leader of the People’s Democratic Party, warns about governor’s rule in the state.
2. In the Hindu, Happymon Jacob sees troubled times ahead for Jammu and Kashmir.
3. In the Telegraph, Mukul Kesavan on Anthony Bourdain, vegetarianism and the mainstream.

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