Social damages to economy can take much longer to correct than demonetisation: Kaushik Basu | business-news | Hindustan Times
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Social damages to economy can take much longer to correct than demonetisation: Kaushik Basu

The former chief economic advisor stressed on the need to have open debates and discussions on issues facing the country.

business Updated: Aug 05, 2017 13:30 IST
File photo of former chief economic advisor Kaushik Basu.
File photo of former chief economic advisor Kaushik Basu.(Reuters Photo)

Amid a debate over incidents of lynching, noted economist Kaushik Basu has warned that social damages could have a long-lasting impact on the economy than some wrong policy moves, “such as demonetisation”.

Delivering the 23rd Lalit Doshi memorial lecture in Mumbai on Friday, he stressed on the need to have open debates and discussions on issues facing the country.

“I have a concern on the social side in our country. It does worry me. The lynching news... is of the kind that disappoints me while sitting in America,” Basu, the C Marks professor of economics at Cornell University of the US, said.

“Social damages to an economy can take much longer to correct than demonetisation or a wrong economic move that can be corrected,” he said.

India is a society that is poor, but is respected for its scientific temper and research, and “we should not backtrack on that,” the former World Bank chief economist said.

The former chief economic advisor said in every society there will be people who destabilise its harmony while talking about the culture and make efforts to go back to that culture.

“We should be proud of our heritage, but we do not want to retreat (to the past). If we do so, that can have a long- lasting effect, not only on the quality of social life, but even on the economy,” he said.

He said one should take pride in one’s literature and culture, but at the same time, should also be pragmatic.

“One example that hurts me as a Bengali from Kolkata is a 1983 decision on easing out English from primary school and making Bengali the primary language of teaching.

“This cultural attempt to reclaim your history by not picking up an instrument, which is a vital instrument for engagement with the modern world, has done huge damages to Bengal’s economy,” Basu said.

He said people at the top level of the government are concerned about this but there is a need to make an effort to translate these concerns into policy on the ground.

Stressing the need to have open debates and discussions on issues, he said, “It’s very important that in a country like ours, you can do serious debates and discuss. You can say that these two policies are good policies and these two are bad.

“If you do not get into these discussions, you will make mistakes and that would really be very unfortunate for the country and the economy in the long run. I just like to believe that we will keep it open.”

About demonetisation, he said it was a very big mistake and has huge negative fallouts.

He welcomed the GST rollout, saying the new tax regime has some teething trouble but it was the right thing to do.

Hailing the bankruptcy law, he said this is an excellent piece of legislation that can improve the country’s ranking in the ease of doing business list that the World Bank releases annually.