Published: October 18, 2014
Varghese K George, Puja Mehra
PTIIn this October 16, 2014 photo, Arvind Subramanian speaks to the media after taking charge as Chief Economic Adviser at North Block.
His approach is in sync with the Centre’s intentions of liberalisation, transparent regulation
Chief Economic Adviser Arvind Subramanian’s free-market convictions dominate his academic work and do not conform to the nationalist and protectionist streak among the leadership of the Rashtriya Swayamsevak Sangh (RSS), the ideological mentor of the ruling Bharatiya Janata Party. But his academic views are unlikely to dictate his policy prescriptions, top government sources told The Hindu.
“Academic studies guide policy formulations, but policies are not dictated by it. The final policy decisions will always be made by the political executive with inputs and advice from the CEA,” one source said.
The senior government functionary explained that Dr. Subramanian’s appointment indicated a trend of internationally acclaimed experts of Indian origin offering to work in India. “Dr. Subramanian’s track record is extraordinary,” he pointed out. Raghuram Rajan, former CEA and now Reserve Bank Governor, also left his position of Chief Economist at the International Monetary Fund to work in the Indian government. Both were colleagues at the IMF.
Dr. Subramanian is a reformist at heart and stands for open, liberal but transparently regulated markets, economist Rajiv Kumar told The Hindu. He will bring to the job emphasis on de-bottlenecking of the supply side and since he favours free trade he will most likely push for increasing India’s exports and for the domestic sector to be less clogged with regulation.
Though few CEAs have traditionally majorly influenced policy-making, Dr. Subramanian has the advantage of being more than a pure academician having worked in the IMF and World Bank systems due to which “he is likely to be a more successful CEA in the midst of the government system and not at the margins of it, marginalised by the bureaucracy,” said Dr. Kumar. Though how much this influence will be will depend on his rapport with the Finance Minister and the Prime Minister. Dr. Subramanian’s approach is thus in sync with the core of the Modi government’s stated intentions of liberalisation and transparent regulation.
CEAs typically define their roles within the government framework which is constrained among other imperatives by political compulsions and Dr. Subramanian is not likely to be different.