Where are our economists?

The IMF’s annual meetings concluded last Sunday on a sober note, observing that the global economy is weak, recovery uneven and risks continue to persist for both advanced and emerging countries. Meanwhile, India’s performance has been rather dismal during the last few years even when compared with BRICS.

It is pertinent to ask why India’s growth performance is so dismal when the country has amongst the best economists in the world. Or is it that the right skill formation and coordination with policy makers is lacking?

There is a need for the economic professionals in the country to provide meaningful advice to the government and administration as is the rich traditional history of the past. The contributions made by the Bombay school even before Independence cannot be forgotten.

What can the economists do now? There are economists belonging to the Indian Economic Services who are busy churning statistics and reports for the benefit of professional research. Then there are non-government, generally academic, economists working in nearly 436 universities spread across the country. It would be safe to assume that though there are at least 5,000 economists in India, they lack synergy in producing output. Is it not amazing that we need to outsource research to multilateral agencies to advise our policy makers? In most cases, such outsourced advice may not eventually be useful for India.

Therefore, India needs to build its own research capabilities in economics. Here are some ways to go about it.

Local and national

India needs a centralised research institution like the National Bureau of Economic Research, Cambridge, Boston, which encourages research and disseminates it across the country. There is a need to have close interaction between the Centre and the States, as well as the RBI, to build synergy between academic economists and policy makers. The authorities could advertise grant to undertake research in specific areas of economic research.

The Indian Economic Association (IEA) could be strengthened with more regional and city chapters to encourage young and budding economists to start contributing to research efforts. To undertake cutting-edge multi-sector research, like the American Economic Association, the IEA could collaborate with other allied sciences for regular conferences.

Research support needs to be enhanced to encourage more seminars/workshops in leading universities/research institutions funded by the government. In a vast country like India, with a large pool of economists, there is need to establish more area-specific think-tanks, especially for the young and bright economists.

The Prime Minister’s Economic Advisory Council (PMEAC) could be made into a permanent body with full-time dedicated members, like the Economic Advisory Council to the President of the US. To attract fresh talent and ideas in the redesigned PMEAC, a few positions could also be offered for post-doctorate research.

To meet specific research requirements in respective States, there is a need to strengthen Planning Boards to match the skills of Planning Commission and have a Chief Minister’s Economic Advisory Council with participation from local economists.

(The author is RBI Chair Professor of Economics, IIM Bangalore)

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