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Eye on economy

From analysing growth to predicting financial disaster and suggesting remedies, economists have a lot to do, says Pranab Ghosh.

education Updated: May 23, 2012 12:41 IST
Pranab Ghosh

He fell in love with economics in high school and took up a combo of economics-statistics-maths for his Class XII Board exams. Economics helped him relate to some of the things he read in newspapers and magazines. “I liked the subject for its common sense and logical approach,” says the man who went on to do his PhD from the Delhi School of Economics (DSE).

Meet Samiran Chakraborty, 36, Head of India Research, Standard Chartered Bank. His first month’s salary as a research associate at DSE was Rs 8000. That was in 1999. Today, he earns many, many times that amount.

“The scope of work for an economist at the moment is very vast. This is true of India as well as the world,” points out Prof B L Pandit, head, department of economics, DSE. “Economic integration in regions and on a global scale has enlarged the scope of enquiry for an economist. Questions related to welfare, trade, growth and inter-country comparisons engage his attention. Development creates disparities, so welfare issues are an important area of enquiry. Similarly, international trade and flow of capital and technology across borders have again enlarged the arena for an economist,” he says.

Chakraborty blames the absence of good economists in the country on the lack of good PhD programmes. This leads to flight of serious and talented students to foreign shores. Moreover, “Most of the courses in economics are oriented towards a theoretical understanding of the subject. Lack of applied knowledge hinders one from playing a market economist’s role,” he says.

What India could do with is greater interface among academia, policymakers and industry professionals, says Dr Amita Batra, associate professor, economics, South Asian Studies, Jawaharlal Nehru University. “Here you get segregated. You are either teaching or part of a think-tank or working with a multinational. There’s no real interface. In the West, policymakers and academia complement each other. They draw upon each others’ strengths. This in turn enriches the profession,” she says.

What's it about
Economics is the study of how people choose to use scarce resources to meet competing desires. Resources include money, property and time. A resource is considered scarce when people cannot get as much of it as they would choose to had the resource been free. Economics is now called the imperial social science, which concerns itself with economic growth, welfare, inter-country economic relations, and globalisation including inter-country trade. The focus might have remained the same over time but the technology of economic enquiry has changed in a big way due to what is called econometrics. Unlike other social sciences, economics can claim to be a science because it can use mathematical and statistical tools and find precise answers with, of course, a degree of error.

Clock work
9 am: Call up traders and sales people in the treasury
10 am: Prepare report on market views and send to clients
11 am: Write research reports on topical issues, giving opinions and forecasts
12 noon: Analyse data and trends
2 pm: Lunch
3 pm: Client calls/meet policymakers/ give a sound byte to the press
5 pm: Apprise senior management of the market and economic developments

The payoff
In academics:
Assistant Professor: Rs 5 lakh to Rs 6 lakh pa
Associate professor: Around Rs 10 lakh pa
Professor: Around Rs 15 lakh pa

In industry:
Entry level: Around Rs 7 lakh pa
Middle level: Around Rs 12 lakh pa
Senior level: Sky is the limit

An enquiring mind, which can focus on economic problems, including theoretical issues
Since the technology of economics is changing, a good background of mathematical tools, statistical tools and econometrics are essential
An analytical approach to problems at hand is a prerequisite

How do I get there?
You need to do 10+2 from any stream and then graduation with honours in economics. A Master’s degree after graduation and then an MPhil and a PhD degree are recommended.

It would be more fruitful if you have maths in senior school. A maths and stats background helps

Institutes & urls
Delhi School of Economics

Centre for Economic Studies and Planning, Jawaharlal Nehru University
cespjnu.in Indian Stastical Institute (ISI), Kolkata and Delhi
www.isical.ac.in and www.isid.ac.in

Indira Gandhi Institute of Development Research

Princeton University

Harvard University

Pros & Cons
Economists are useful to the society as they analyse issues related to growth and development, welfare and policy formulation — both long- and short-term.

They evaluate government policies and assess their long- and short-term significance for the country, thereby contributing to growth
They have to be as logical as mathematicians but the danger is that by getting more theoretical they may lose touch with ground realities.