Manmohanomics 2.0: pundits plot policy
On June 27, a day after taking charge of the finance ministry for a brief period, Prime Minister Manmohan Singh got down to his task by summoning top financial administrators to reverse a discomforting deceleration in the economy. HT reports. Brain trust to buck up the economybusiness Updated: Sep 08, 2012 02:09 IST
Behind the quiet exterior, the Prime Minister has been in a bustle.
On June 27, a day after taking charge of the finance ministry for a brief period, Prime Minister Manmohan Singh got down to his task by summoning top financial administrators to reverse a discomforting deceleration in the economy.
Singh first met C Rangarajan, the chairman of his economic advisory council, and Montek Singh Ahluwalia, the Planning Commission’s deputy chairperson, to discuss ways to revive the sagging economy and, possibly, soothe the nerves of angry industrialists and anxious investors.
The Prime Minister later met the then chief economic adviser, Kaushik Basu, along with secretaries in the finance ministry. Separately, on the same day, the PM’s Economic Advisory Council met to begin the spadework to tone up the broader economy.
The fact that the Prime Minister himself, an economist by training, sought the counsel of professional economists to steer India out of a web of economic woes is a sign of the changing times, where policy making has moved beyond the confines of ministry premises to think-tanks and independent advisers.
“The role of think-tanks and professional economists is increasingly becoming more important. Such interactions play a very important role,” said Vijay Kelkar, former finance secretary and 13th finance commission chairman.
Eminent economists, over the years, have left behind a rich footprint whose body of work has significantly influenced India’s policy making, particularly in the areas of poverty, food management, social security, fiscal management and taxation.Days after he took over the finance minister, P Chidambaram unveiled a roadmap to boost investment and economy by fine-tuning policies to put in place a stable and non-adversarial tax regime, a possible cut in interest rates and measures to attract domestic savings and foreign capital. On fiscal consolidation, Chidambaram said he has asked Kelkar, Indira Rajaraman and Sanjiv Misra to assist the government "in formulating the path of fiscal consolidation and we expect that the work will be completed in a few weeks".
“A top-to-bottom policy-making approach is wrong. There are great examples of successful policy making outside government-departments such as in the health sector in Andhra Pradesh and the public distribution system in Kerala,” said Kelkar.
Over the years, the backroom discussion process has gone much beyond the consultation process within the official bureaucracy.
“At the formal level government talks to a lot of people such as advisory committees, the Planning Commission and other forums,” Pratap Bhanu Mehta, president of New Delhi-based think-tank Centre for Policy Research.
“The real question is how much impact think-tanks have on final decision making. This is an interesting issue in a democratic society,” Mehta said.
Other experts, who have headed think-tanks and advised governments on drafting policies, echoed a similar opinion.
“Role of policymaking as become very important, particularly in the areas of research and advocacy because the university set-up has failed to deliver on either,” said Bibek Debroy, eminent economist and professor at CPR.
First Published: Sep 07, 2012 21:22 IST