India needs a third generation of policy economists to provide the political leadership with a broad future agenda on the economy
In an interview he gave to The Indian Express in July 2016 to mark 25 years of economic reforms, Manmohan Singh spoke about the importance of the policy economists who had worked on the reforms agenda in the years preceding the actual event. His statement needs fresh attention at a time when Arvind Panagariya has resigned from NITI Aayog. Two other lateral entries into government in the past few years also moved on after short stints – Kaushik Basu and Raghuram Rajan.
Economic policy is a collaborative effort between political leaders, civil servants and policy economists. The 1991 reforms would definitely not have been possible without the political backing provided by P V Narasimha Rao.
The radical policy changes were pushed through an inertial bureaucracy by senior civil servants such as A N Verma and Naresh Chandra. And a stellar group of policy economists prepared the ground for the change of direction in the years preceding the actual event.
Most of them were lateral entries into government – Manmohan Singh, Montek Singh Ahluwalia, Bimal Jalan, Vijay Kelkar, C Rangarajan, Shankar Acharya, Rakesh Mohan and several others. These economists stayed on for many decades, though a few lateral entries such as Vijay Joshi and Ashok Desai had short stints.
Some of their contributions through the 1980s – and this is not a comprehensive list – are worth repeating here. Manmohan Singh wrote the landmark seventh Five-year Plan that shifted the focus of industrial policy from asset creation to productivity.
Ahluwalia was at the forefront of trade reforms. He also wrote the famous “M Document” in the summer of 1990, which anticipated many of the major policy reforms announced between 1991 and 1993.
Bimal Jalan was the main author of the long-term fiscal policy.
Vijay Kelkar was the driving force behind fiscal and tax reforms, including the goods and services tax.
C Rangarajan committed the Reserve Bank of India to monetary targeting, and also worked hard to end the automatic monetisation of fiscal deficits.
Shankar Acharya was arguably the most influential chief economic adviser ever.
Rakesh Mohan prepared the industrial policy reforms agenda.
Also, outside experts such as M Narasimham and Raja Chelliah provided road maps for financial and tax reforms.
The team that provided intellectual heft to the economic reforms was the second generation of economists in government. It replaced an earlier generation that had people such as C D Deshmukh, J J Anjaria, I G Patel, L K Jha, P N Dhar, Lovraj Kumar, Pitambar Pant – while the Planning Commission itself had used the talents of young economists such as Jagdish Bhagwati, Amartya Sen and T N Srinivasan.
At the same time, B R Shenoy, M Narasimham, Deena Khatkhate, Anand Chandavarkar and V V Bhat were in the economics department of the Reserve Bank of India.
India now needs a third generation of policy economists to provide the political leadership with a broad future agenda on the economy, as well as advice on how to manage it in the short term.
The cupboard looks a bit bare right now, despite the presence of talented economists such as Urjit Patel, Arvind Subramanian, Bibek Debroy, Viral Acharya and Sanjeev Sanyal. This is in sharp contrast to the manner in which China has upgraded the quality of its economic administrators over the past decade, though that reflects not just the political will to get experts into government but also the rapid advances in the quality of Chinese university education.
There are two intersecting routes to strengthen economic expertise in Indian policy. First, there is a crying need to bring a new generation of policy economists into government, similar to what happened in the 1950s and then in the 1980s.
Second, the task of policy research should be done in collaboration with a network of universities and research institutes across the country.
The path-breaking Economic Surveys helmed by Arvind Subramanian over the past three years are an excellent example of how young economists from within the finance ministry, as well as from outside, can be brought into the policy process. More of this needs to be done.
There is a growing chorus of voices arguing that governments do not need economists. All they need are good administrators. The reality is more complex. A motoring analogy could be useful. It is the political system alone that has the right to decide which direction a country should be moving in. Then there is the need for experts to design policy paths that will help the country get there. And the eventual journey is highly dependent on good administrators who keep the vehicle on the road.
India seems to be weak on one of the three components of good economic management right now.
Receive Daily Updates
Recent Posts
- Lowering Emissions by Accelerating Forest Finance (LEAF) Coalition, a collective of the United States, United Kingdom and Norway governments, came up with a $1 billion fund.
- LEAF is supported by transnational corporations (TNCs) like Unilever plc, Amazon.com, Inc, Nestle, Airbnb, Inc as well as Emergent, a US-based non-profit.
- The world lost more than 10 million hectares of primary tropical forest cover last year, an area roughly the size of Switzerland.
- Ending tropical and subtropical forest loss by 2030 is a crucial part of meeting global climate, biodiversity and sustainable development goals. Protecting tropical forests offers one of the biggest opportunities for climate action in the coming decade.
- Tropical forests are massive carbon sinks and by investing in their protection, public and private players are likely to stock up on their carbon credits.
- The LEAF coalition initiative is a step towards concretising the aims and objectives of the Reducing Emissions from Deforestation and Forest Degradation (REDD+) mechanism.
- REDD+ was created by the United Nations Framework Convention on Climate Change (UNFCCC). It monetised the value of carbon locked up in the tropical forests of most developing countries, thereby propelling these countries to help mitigate climate change.
- It is a unique initiative as it seeks to help developing countries in battling the double-edged sword of development versus ecological commitment.
- The initiative comes at a crucial time. The tropics have lost close to 12.2 million hectares (mha) of tree cover last year according to global estimates released by Global Forest Watch.
- Of this, a loss of 4.2 mha occurred within humid tropical primary forests alone. It should come as no surprise that most of these lost forests were located in the developing countries of Latin America, Africa and South Asia.
- Brazil has fared dismally on the parameter of ‘annual primary forest loss’ among all countries. It has lost 1.7 mha of primary forests that are rich storehouse of carbon. India’s estimated loss in 2020 stands at 20.8 kilo hectares.
- Between 2002-2020, Brazil’s total area of humid primary forest reduced by 7.7 per cent while India’s reduced by 3.4 per cent.
- Although the loss in India is not as drastic as in Brazil, its position is nevertheless precarious. For India, this loss is equivalent to 951 metric tonnes worth carbon dioxide emissions released in the atmosphere.
- It is important to draw comparisons between Brazil and India as both countries have adopted a rather lackadaisical attitude towards deforestation-induced climate change. The Brazilian government hardly did anything to control the massive fires that gutted the Amazon rainforest in 2019.
- It is mostly around May that forest fires peak in India. However, this year India, witnessed massive forest fires in early March in states like Odisha, Uttarakhand, Madhya Pradesh and Mizoram among others.
- The European Union’s Copernicus Atmospheric Monitoring Service claimed that 0.2 metric tonnes of carbon was emitted in the Uttarakhand forest fires.
- Implementation of the LEAF Coalition plan will help pump in fresh rigour among developing countries like India, that are reluctant to recognise the contributions of their forest dwelling populations in mitigating climate change.
- With the deadline for proposal submission fast approaching, India needs to act swiftly on a revised strategy.
- Although India has pledged to carry out its REDD+ commitments, it is impossible to do so without seeking knowledge from its forest dwelling population.
Context:-
At the recently concluded Leaders’ Summit on Climate in April 2021, Lowering Emissions by Accelerating Forest Finance (LEAF) Coalition, a collective of the United States, United Kingdom and Norway governments, came up with a $1 billion fund plan that shall be offered to countries committed to arrest the decline of their tropical forests by 2030.
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]What is LEAF Coalition?
Why LEAF Coalition?
Brazil & India
According to the UN-REDD programme, after the energy sector, deforestation accounts for massive carbon emissions — close to 11 per cent — in the atmosphere. Rapid urbanisation and commercialisation of forest produce are the main causes behind rampant deforestation across tropical forests.
Tribes, Forests and Government
Disregarding climate change as a valid excuse for the fires, Indian government officials were quick to lay the blame for deforestation on activities of forest dwellers and even labelled them “mischievous elements” and “unwanted elements”.
Policy makers around the world have emphasised the role of indigenous tribes and local communities in checking deforestation. These communities depend on forests for their survival as well as livelihood. Hence, they understand the need to protect forests. However, by posing legitimate environmental concerns as obstacles to real development, governments of developing countries swiftly avoid protection of forests and rights of forest dwellers.
For instance, the Government of India has not been forthcoming in recognising the socio-economic, civil, political or even cultural rights of forest dwellers. According to data from the Union Ministry of Tribal Affairs in December, 2020 over 55 per cent of this population has still not been granted either individual or community ownership of their lands.
To make matters worse, the government has undertaken systematic and sustained measures to render the landmark Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 ineffective in its implementation. The Act had sought to legitimise claims of forest dwellers on occupied forest land.
Various government decisions have seriously undermined the position of indigenous people within India. These include proposing amendments to the obsolete Indian Forest Act, 1927 that give forest officials the power to take away forest dwellers’ rights and to even use firearms with impunity.
There is also the Supreme Court’s order of February, 2019 directing state governments to evict illegal encroachers of forest land or millions of forest dwellers inhabiting forests since generations as a measure to conserve wildlife. Finally, there is the lack of data on novel coronavirus disease (COVID-19) deaths among the forest dwelling population;
Tardy administration, insufficient supervision, apathetic attitude and a lack of political intent defeat the cause of forest dwelling populations in India, thereby directly affecting efforts at arresting deforestation.
Way Forward
Tuntiak Katan, a global indigenous leader from Ecuador and general coordinator of the Global Alliance of Territorial Communities, aptly indicated the next steps at the Climate Summit:
“The first step is recognition of land rights. The second step is the recognition of the contributions of local communities and indigenous communities, meaning the contributions of indigenous peoples.We also need recognition of traditional knowledge practices in order to fight climate change”
Perhaps India can begin by taking the first step.