Tue Jul 30 2013
In this Walk the Talk on NDTV 24x7, economist Arvind Panagariya tells The Indian Express Editor-in-Chief Shekhar Gupta why he is "optimistic" about Modi and why this has been "one of the worst eras of performance by an RBI governor"
I am at the campus of the National Council of Applied Economic Research in Delhi. And my guest this week is a brilliant economist who I shall not describe as an establishment economist—although that is a species found widely in institutions in India—and somebody the BJP takes very seriously and I hope it continues to listen to...
Well, the UPA takes me seriously too.
...Arvind Panagariya—Bhagwati professor at Columbia, former chief economist at ADB and writer of many books, including your recent one with Jagdish Bhagwati, India's Tryst with Destiny, and somebody willing to question establishment views even within the intellectual establishment. How tough is that?
If you believe in integrity and if you believe that you should speak your mind, then it is not so tough. And if you are not looking for a job with the government, it is even easier.
With this government? Or maybe that works better with the next one?
Look, if the next government does good things, then I'll be with them, but if they really don't do the right things, they will get my criticism too.
Describe this Indian economic establishment to me.
In our tradition, there isn't enough questioning, particularly when it comes to social programmes run by the government, which has no real capability to deliver. Even then, we don't somehow question. We criticise, we say the government can't do this or that, complain about corruption, but when somebody says this needs to be done, we say the government must do it. There is a disconnect.
So, there is a touching faith in the government.
There is. Look at what happened in Bihar to those 23 children in the mid-day meal (tragedy). It reflects gross incompetence in running those kinds of programmes. Yet, we won't sit back and say that maybe there is an alternative solution that we could work on, with the same objective of doing good to the people at large and reducing poverty.
Do most modern economists know this in India?
Well, I think we are trying to change the narrative as it existed and that was a very important part of the book Jagdish Bhagwati and I wrote. We took various myths—that growth doesn't really matter enough and that redistribution itself can be sufficient—and demolished them one by one with evidence and data.
Would you say that India's intellectual economic establishment is complicit in perpetuating these myths?
It certainly has not played its role and, to a large degree, it has played along. From the beginning, the Left has been pretty strong in India, intellectually. The kind of Right that exists in other parts of the world, like Thatcherite or Reaganite, doesn't even exist in our system. All of us are by that measure left-of-centre. I mean, we all believe in social programmes, in redistribution, nobody says that growth alone will do the trick. This partly comes from this old tradition that the government has to do everything. We built it into our psyche when we started off on this road, first under Jawaharlal Nehru and then in a big way under Mrs Gandhi. By the time Mrs Indira Gandhi became prime minister, we got into tourism, hotels, taxis and all sorts of things.