Rajaraman provides a preamble to each part which describes the context in which her essays were penned and incorporates the data on the real growth rates or inflation, whichever is applicable.
Economically Speaking
Indira Rajaraman
Publisher: Academic Foundation
Pages: 290; Price: Rs 995
Indira Rajaraman is one of India’s top economists. She is a Ph.D from Cornell University. She was a member of the Thirteenth Finance Commission. For two decades she taught Economics in the Indian Institute of Management, Bengaluru. Apart from being a Director in the Central Board of the R B I, she held with distinction the Reserve Bank of India Chair at the National Institute of Public Finance and policy, New Delhi. Her’s voice is one heard with utmost respect.
The book under review is a collection of 66 essays published in Business Standard, Mint, Hindu and in a journal “Tax Focus Justice”. They relate to the momentous years from 2010 to 2015. The overarching shadow over the issue addressed in each essay was the Great Crash of 2008, the aftershocks of which continue to reverberate to this date. The quinquennium was swept by a brewing discontent which manifested in street demonstrations in India against corruption and the Occupy Wall Street movement in developed world against corporate greed. In India, discontent led to the massive mandate won by the Bharatiya Janata Party.
There are six parts. Rajaraman provides a preamble to each part which describes the context in which her essays were penned and incorporates the data on the real growth rates or inflation, whichever is applicable.
The first part “The World and India” covers the important subject of the global policy ferment caused by the Great Crash as events developed in the succeeding years. Among other subjects, the part dissects the role of the IMF in capital controls, responses to the debt implications of the calls of the G-20 for a concerted financial stimulus and an analysis of the reform of the International Monetary System.
Especially worth highlighting is the essay on “the Queen’s Finest Hour”. Queen Elizabeth paid a visit to the London School of Economics and asked the huge gathering of brilliant economists “Why they had failed to foresee the crisis coming?” That question continued to hang over the world of economists and bankers. In the years leading upto the crisis there were only two public warnings; one by Raghuram Rajan at the annual meeting of the Central Bankers at Jackson Hole in 2005 and the other by Nouriel Roubini at the IMF Seminar in 2006. It is history that these two were heckled by several persons.
Part Two deals with “Institutions and Governance”. Rajaraman analyses the “Anna Hazare Movement” against corruption which she treats as systemic rather than as a moral issue. She provides a critical review of the CAG Reports on the allocation of spectrum to telecom companies and coal mining rights to private companies.
“A Checklist of Waste” is about needless waste of electricity and suggests simple changes to reduce waste. In an essay on the Planning Commission the author asserts that it was a powerful centre of extra-constitutional authority. It was even anti-constitutional since its existence effectively blocked the appointment of the Inter-State Council for four decades.
“Centre and States” is the subject matter of Part Three. There are three essays on the 13th Finance Commission of which Rajaraman was a member. There is a critical analysis of additional grants prescribed by the 13th Finance Commission, A short note is provided of the Fourteenth Finance Commission.
Part Four is dedicated to “Budgets and Taxation”. One essay is a review of the fiscal impact of past Pay Commissions and is effectively an account of the fiscal history of India of both Centre and States since 1996. There are topical articles on the Union Budgets of 2010, 2012 and 2015.
“Inflation and Monetary Policy” is the subject of Part Five. There is a thorough analysis of the Report of the RBI Expert Committee to revise and strengthen the monetary policy framework. The economist believes policy rates take time to transmit through the system and constant up-down changes in policy rates leads to directional confusion in monetary transmission.
The final Part is on “Reforms, Inequality and Growth”. This tackles several important topics as caste and census, schools, food security. The author clinically analyses the Nachiket Mor Committee on Financial Inclusion. It shows how high-rate differential can be reduced through group formation and what is most important is it shows how access can be facilitated.
This book combines tremendous scholarship with deep insights and is bound to have a great impact on thinking about India. It enables us to appreciate the current burning public policy issues.
Indira Rajaraman, Economically Speaking, P P Ramachandran, Academic Foundation, Thirteenth Finance Commission, Anna Hazare Movement, A Checklist of Waste, Rajaraman, Budgets and Taxation, monetary policies
