Criticisms of Indian Nobel laureate highlight BJP's unease with foreign-trained economists

NEW DELHI - As the country celebrated the Nobel Prize awarded to Indian-origin economist Abhijit Banerjee last month, an unlikely controversy broke out, with certain political leaders from the ruling Bharatiya Janata Party (BJP) questioning his credentials.

While congratulating the laureate, India's Minister for Commerce and Industry Piyush Goyal dissed his thinking as "totally left-leaning".

"He had praised the NYAY scheme effusively, but the people of India totally rejected his thinking," the minister said at a press conference on Oct 18.

This was a reference to the assistance the economist gave to BJP's rival, the Congress party, in formulating NYAY or the Nyuntam Aay Yojana, a minimum income guarantee scheme that was a key feature of the Congress manifesto for the general election earlier this year.

Dr Banerjee later told Indian news channel NDTV that he was not partisan in his economic thinking and that Mr Goyal's comments questioned his professionalism.

Mr Goyal was not the only one from his party to brush aside the Nobel winner.

However, Prime Minister Narendra Modi has distanced himself from the criticism of Dr Banerjee and met him on Oct 22 in New Delhi.

In a tweet later, he said the economist's "passion towards human empowerment is clearly visible".

"India is proud of his accomplishments," added Mr Modi.

Yet, criticisms of Dr Banerjee by certain BJP leaders bring into focus the party's uneasy relationship with Western-trained economists who have had divergent views on the state of the Indian economy and how it should be steered away from the current choppy waters.

Two governors of the Reserve Bank of India (RBI) who served under the previous BJP-ruled government, Dr Raghuram Rajan and Dr Urjit Patel - who both studied and worked in the United States - quit their role following differences with the government on key economic issues.

Another US-trained economist, Dr Arvind Subramanian, who was the government's chief economic adviser until June last year, also resigned before his term ended.

In June this year, he released a paper wherein he claimed India had over-estimated its gross domestic product (GDP) growth for 2011-2017 by as much as 2.5 percentage points. The same month, Dr Viral Acharya, the US-trained RBI deputy governor, also resigned following differences with the government.

Mr Mihir Swarup Sharma, a senior fellow at Observer Research Foundation and head of its Economy and Growth Programme, told The Straits Times this government places a great premium on political and ideological loyalty.

"Those with no such connections, such as most Western-trained economists, are suspect in their eyes. They are never totally trusted or listened to, and it is no surprise they leave," he said.

Foreign-trained economists working for the government have also been caught in the crosshairs of certain influential nativist voices who propound a strong self-reliant economic model for India.

One such voice, Dr Subramanian Swamy, a BJP member of the Upper House of the Parliament who too studied in the US, had described Dr Arvind Subramanian as a "blue-blooded American" and even termed Dr Raghuram Rajan as "mentally fully not Indian".

Dr Banerjee also expressed concern on the state of the Indian economy at a press conference after being named a Nobel winner along with two other economists for their "experimental approach" to fighting global poverty.

"The economy is doing very badly in my view," he said, bringing up data from the National Sample Survey that showed average consumption in urban and rural areas in India between 2014-15 and 2017-18 had gone down.

"And that's the first time such a thing has happened in many many many many many many years. So that's a very glaring warning sign," he added.

Mr Sharma pointed out that Dr Banerjee's comments were objective statements of fact that the "government had long tried to deny, and is still trying to discredit".

"Oddly, one of Banerjee's recommendations is to listen more to legitimate criticism, and the minister (Mr Goyal) would do well to follow that advice," he said.

India's GDP in the April-June quarter of this financial year grew at just 5 per cent - the lowest in six years and a significant fall from around a growth of 8.2 per cent in the same period last year.

Despite economic data pointing to a slowdown, various ministers have rebuffed criticism from economists worried about a potential recession.

"It is certainly worrisome that there is insufficient top-quality economic advice on hand. But what it reveals is the real problem: The government itself cares too little about expertise and is too confident of its own abilities. That quite unjustified overconfidence is what should worry us," Mr Sharma added.

The current chief economic adviser, Dr Krishnamurthy Subramanian, had argued in an Aug 30 tweet that steps taken by the government for banks and the financial sector, along with structural reforms, should improve investment and drive the economy to higher growth.

The economist, who also studied and worked in the US, had strongly defended the November 2016 move to recall high-value currency notes.

It has been, however, panned by many economists, including Dr Rajan, Dr Arvind Subramanian and Nobel laureate Dr Amartya Sen.

Mr Modi, in a March 2017 election rally, had retorted that "hard work is more powerful than Harvard", after Dr Sen, who teaches at Harvard University, had described the move as "despotic".

Mr Gopal Krishna Agarwal, BJP's national spokesman for economic affairs, told ST that the views of individuals should not be held up as those of his party.

"We have been, are and will be (open to advice from foreign-trained economists)," he said.

"But we are open to their advice in an advisory capacity only. They cannot expect everything is acceptable as it is. Ultimately, the decision of political bosses is supreme and the accountability of the elected government to the people is more than that of persons who are giving advice."

Arguing that international bodies such as the World Bank and International Monetary Fund are not the only ones to have a prescription, he said that "Indian situations need domestic minds".

He also pointed out that the PM continues to engage with global investors and corporate houses, as well as foreign think tanks.

"We understand the capacity that has been built (abroad) over the years is immense and that kind of talent is not available in many Indian think tanks," Mr Agarwal added.