Our economists should fight for the country’s economy

The economist made this statement hours after the proposal was thrown out by the Union Cabinet 89,047 crore lifeline to BSNL. it has been received 3.22 trillion in the last four years alone. Indian taxpayers have to keep this public sector dinosaur alive only so that its salary and pensioners do not become unhappy with the current governments at the time of elections. Does India need reforms? Government and BSNL employees will probably say ‘no’. Taxpayers and sectors that can use our tax money more productively than BSNL will say ‘yes’.

Air India was not sold to the Tata group because of a strong belief in reforms or a belief in privatisation. Public discourse had ensured that the taxpayers were well aware of the mismanagement of Air India and their patience with it had run out. BSNL does not see any such danger.

Here’s the gist of it. While the course has become largely mud-slinging, with casual references accusing it of intentionally misreading data, not caring enough about India’s well-being or not being aware of India’s ground realities But there is hardly any meaningful policy debate in between. Economist. Policy positions no longer seem to be based on economics. Instead, economists’ public statements seem to indicate an inclination toward personality or politics, perhaps expressing frustration at being elected to policymaking positions, or being fired from such jobs.

All of this makes economic policy much weaker than it needs to be, with the government not being smart on important, complex economic policy puzzles. Debate and discourse can help nurture policy capacity in government. It is no secret that amid India’s economic constraints, there is also a lack of sound policy-making capacity on the part of the government. When Finance Minister Nirmala Sitharaman makes it clear in her public speeches that she is looking for ideas to encourage private investment, which is unsatisfactory even after cutting corporate taxes, she appears to be saying that the task at hand is there is a problem. Remarkably, few economists are interested in saying how best to handle it. It is clear that the government has limited credible policy advice on two things India continues to struggle with – creating jobs and giving the rich their fair share of taxes. But there is little policy debate on what should be done.

It appears that the government attracts cheerleaders who rarely bother to pretend to be cool. If his words mattered in policy making, he would be writing more on government files than on newspapers and social media. The Narendra Modi administration once had a reputation for listening to economists on at least some policy matters and delivering good results. The availability and affordability of pulses have improved following the implementation of the policy advice of a committee headed by the then Chief Economic Adviser in 2016; The RBI governor then supported a change in inflation targeting. Writings by a former member of the prime minister’s economic advisory council helped bring to light risky over-optimism in the finance ministry’s fiscal maths, which has led to significant reforms. Now even good policy ideas get tarnished by the company of these economists. When so many economists do not appear to be economists in public discourse, are only politicians to be blamed?

The United Progressive Alliance government was no more fortunate, although it had a number of technocrats with extensive experience in handling economic crises, including civil service officers in key economic ministries who had been Manmohan Singh’s students when he taught at the Delhi School of Economics. , That excellent pool of talent has not been optimally utilised, as economic advice routinely gets politicised. The difference was that he fought on behalf of the economy within government, while maintaining a professional distance in public discourse. Economists and technocrats now generally advocate for policy announcements in the public sphere, playing the role of spokespersons rather than policy advisors.

The argument that without reforms, growth can run on autopilot almost kills all scope for policy advice. Are Indian economists constantly giving space to politicians on issues on which they should be vocal? The government told Parliament that it would not appoint a Fiscal Council. Perhaps he feels that only politicians and bureaucrats can give him the necessary technical advice. Economists have done little to challenge the government’s position. Meanwhile, speculation is rife in Raisina Hill that the government will choose a politician or former bureaucrat to head the 16th Finance Commission and not a technocrat capable of getting to the bottom of matters relating to fiscal federalism. Will economists simply turn a blind eye?

To his credit, the finance minister has acknowledged that an echo chamber in the finance ministry was not serving the purpose of policy making. Two economists with substantial social media skills were removed from policy advisory roles and later rehabilitated into positions where spokeswoman skills could come in handy. Perhaps this is an opportunity for economists to draw public attention back to their policy advice skills?

Pooja Mehra is Consulting Editor, Mint and author of ‘The Lost Decade (2008-18): How India’s Growth Story Devolved into Growth Without a Story’.

Updated: July 02, 2023, 11:37 PM IST