Arvind Subramanian, a native of Tamil Nadu, is an US-based economist who’s just been made the new Chief Economic Adviser to the Government of India. He took charge on 16 October 2014, succeeding Raghuram Rajan who moved to the RBI last September to helm the regulator as its governor. Subramanian has served as the Dennis Weatherstone Senior Fellow at the Peterson Institute for International Economics and as a Senior Fellow at the Centre for Global Development, both in Washington DC. Formerly an economist with the IMF, he is well-known for his authoritative work on the economies of India, China and the changing balance of global economic power. He is author of two books, “India’s Turn: Understanding the Economic Transformation,” 2008, “Eclipse: Living in the Shadow of China’s Economic Dominance,” 2011, and is co-author of “Who Needs to Open the Capital Account ?” published in 2012. NRI Achievers paints a bio-sketch of him for our readers.
Arvind Subramanian is an alumnus of St. Stephens College Delhi and IIM Ahmedabad. He obtained his M.Phil and D.Phil from the University of Oxford. ‘Foreign Policy’ magazine, in 2011, found it fit to name him among the ‘Top 100 Thinkers’ of the world. He has been an adviser to the Indian govern ment in different capacities, which include his role as a member of the Finance Minister’s Expert Group on the G-20. Arvind taught at Johns Hopkins’ School for Advanced International Studies from 2008 to 2010 and at Harvard University’s Kennedy School of Government from 1999 to 2000. He has also been an assistant director in the research department of the International Monetary Fund. Early in his career, he worked at GATT (the General Agreement on Tariffs & Trade), during the Uruguay Round of trade talks in the late 1980s and early ’90s. That particular experience could come in quite handy to deal with India’s current tussle with the GATT’s successor body, the World Trade Organization. His academic work has focused on trade and its effects on developing countries. His writings on India’s economic emergence since the 1980s have tried to deepen simplistic conventional narratives. In a 2005 paper written with economist Dani Rodrik, he argued that the real catalysts of the country’s recent decades of fast growth came a decade before 1991 reforms that liberalized investment and production. According to the authors, the impetus was provided by the then-prime minister Indira Gandhi’s shift to a “pro-business orientation.” Governments in the ’80s cut corporate taxes, lifted price controls and eased other restrictions on manufacturing capacity, which first spurred firms to become more productive, Messrs. Rodrik and Subramanian laud India’s “pro- market” reforms a decade later, which allowed greater foreign investment and domestic competition, as having made a big difference. But the “pro-business” steps, which favored incumbent firms, were important too. As the Indian economy, after nearly a decade of rapid growth, sputtered in 2012, Arvind Subramanian participated in an online debate organised by the Economist with Congress-party lawmaker Shashi Tharoor on the question of whether the country was losing its way. He argued that it indeed was. “For every cheery statistic that Shashi Tharoor invokes,” he wrote, “at least as many gloomy ones are there to be counter-invoked.” He argued that there are limited returns for the Indian government in merely letting go, and leaving more to markets and the private sector. The really crucial task for the government, he said, is to do what it does better. “There is a race between rot and regeneration in [the] underlying institutions of the state and politics. And it is far from obvious that the forces of regeneration are winning.” By the end of the debate, two- thirds of online readers had voted on the dide of Arvind Subramanian.
In an essay published last year in the volume “Reimagining India,” Arvind Subramanian highlights the country’s economic and political “precocity”: India’s economy mani fests traits more often found in the rich world, for instance its reliance on services rather than manufacturing to power growth. And democracy has been sustained for decades despite low levels of income, education and industrialization. India’s historical uniqueness explains much of its potential, he writes. But it also makes the country’s future singularly peril-filled: “In the long run, growth is determined by effective state capacity — and that is India’s weakness compared with China.” In that essay, he specifically highlighted Narendra Modi’s potential to “deliver good governance and reforms.” Nonetheless, he hasn’t on any count turned a cheerleader since Modi’s election as prime minister this spring. To wards the end of June, he published a “provisional scorecard” for the Modi government on the Peterson Institute’s website: Three As and one A- for the new administration’s efforts to curb grain and vegetable prices and ease labor laws. But a D for threatening to raise import duties on sugar — an effort, he said, to appease local sugar lobbies. In another article on the Peterson Institute’s website, Subramanian criticized the govern ment’s first budget, which was unveiled last month, as “disappointing but retrievable.” Observers and critics shouldn’t overlook the budget’s failure to roll back subsidies, he wrote, or its implausibly optimistic assessments of tax revenue and deficit reduction. “But they should also give this government the benefit of the doubt and time to translate its laudable vision into recognizable reality.” Any key economic policymaker in any government ought to be able to conceptualise problems that the country faces, devise solutions to such problems that are both effective and practical, and be able to articulate those strategies clearly inside and outside of the government, and persuade all relevant players to support them. On all these counts, PM Narendra Modi seems to have has made a really inspired choice in picking Arvind Subramanian to be the Chief Economic Adviser (CEA) to the Government of India.