India-born economist Arvind Panagariya gave the strongest possible indication on Friday that he was open to joining a Narendra Modi-led central government after the Lok Sabha elections.
Arvind Panagariya, professor, Columbia University
The Columbia University professor stated that as Prime Minister (PM), Modi would be able to run a “well-functioning” government, remove the policy freeze and reassure the bureaucracy about the PM’s backing for legitimate decisions.
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“If I am convinced that I will positively contribute to the betterment of the nation and Mr Modi invites me to join his government, family circumstances permitting, I will do so,” Panagariya, 61, told HT in an emailed interview.
Panagariya’s response came the same day eminent economist Jagdish Bhagwati told Reuters that people close to Modi had approached him to ask about Panagariya’s suitability for a role as a probable chief economist to the PM.
Panagariya, who, with Bhagwati, last year co-authored a book “Why Growth Matters: How Economic Growth in India Reduced Poverty and the Lessons for Other Developing Countries,” said that the outlook for the Indian economy was “excellent” with Modi likely to be the PM.
“Most of the conditions for a return to 6 to 7% growth within a year are in place. The main missing gradient is a well-functioning government,” Panagariya said.
“My expectation is that Modi will correct this deficiency,” he added.
Panagariya also commended RBI governor Raghuram Rajan, saying that he was doing a “terrific job,” thereby hinting that replacing Rajan with a new central bank chief by the new government would not be a prudent move.
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“Modi himself is a pragmatic politician who will make a decision solely on the consideration of what would best promote the national interest,” he said.
Panagariya, who said that he has provided “some inputs” on design of BJP’s economic policy, said that the recently enacted land acquisition act was the single biggest hurdle the next government will inherit from the UPA regime.
“It rightly tried to correct the injustice that had been happening to the farmers under the old, 1894 Act but the solution has turned worse than the problem,” he said.
“(To turnaround the economy) appoint a pragmatic environment minister; end the paralysis in decision-making by reassuring the bureaucracy that the PM would take responsibility for all their legitimate decisions; fix the health of the banks and reform the recently enacted land acquisition act,” he said.
Panagariya, said he “wasn’t surprised” by the BJP’s vocal opposition to foreign direct investment (FDI) in multi-brand retail.
The party is of the view that large deep-discount stores of global retail giants will put the livelihood of millions of small traders and street vendors at risk.
“Small shopkeepers have been traditionally the largest constituency of the BJP and their view of retail foreign direct investment is determined by that consideration,” he said.
Panagariya, a strong advocate of market-friendly policies, said that since Gujarat has followed these policies, the “Gujarat Model” metaphors are helpful in public policy discourse.
“I have used the term “Gujarat Model” to describe these policies,” he said.
On Modi’s prospects in the current Lok Sabha elections, Panagariya said that “since 1984, we once again have a wave election in which people are voting for Modi and against the Congress regardless of the candidate in their constituencies or the performance of the incumbent state government. I expect the NDA to comfortably pull off an absolute majority.”