“Eminent” economists and their great aspersions

Exclusive to Vedic Management Centre by Dr David Frawley & U. Mahesh Prabhu

After a series of failed attacks against Prime Minister Narendra Modi and his government, mainly relative to alleged suppression of dissent – the opposition has begun a predictable new tirade. This time at the helm are not politicians but “eminent economists”, though their political biases are obvious.

There are only two places where economists continue to gain some prominence in the world today – media and academia. When some economists do get laurels and accolades it’s not for what they have accomplished in the economic and business fields – but for what they’ve “suggested”, “professed” and “theorized”, which is supposed to be of great benefit, yet is seldom ever practically implemented in a positive manner.

Strange as it may sound – being an economist is perhaps the only profession where saying is believing – for anything they say is judged by “futuristic implications”, not actual results. In laymen terms, all that they say is jargonized while what they do is prophesized. They are good at imaginary fortune telling – not practical solution giving.

When the 2008 global economic slowdown happened – there were two major culprits behind it, namely: politicians and economists. While politicians paid for their mistakes by their loss in subsequent elections – economists continued to draw their salaries and stock benefits. Not a single economist readily took blame for a condition they were behind – yet many made handsome money by cleverly playing the blame game for the debacle. One such economist appears to be former Governor of Reserve Bank of India – Raghuram Rajan.

Interestingly, while he worked as the head of a country’s august governing body, he continues to be on the payroll of University of Chicago Booth School of Business. After his tenure at the bank – he promptly returned to serve in this lucrative position. No big deal perhaps. Yet, there is a moral question which no one seemed to have asked. Did he secure his position because he thought India would not be a place for him to be after his assignment was over? Or did he not believe in the future of India’s economy? Governor of RBI gets around 200,000 INR as remuneration per month – a paltry sum compared to what a professor at revered business school in United States earns.

There was a good reason for the then Congress led United Progressive Alliance (UPA) government to hire him. He had apparently “predicted to precision” the outcome of 2008 global economic slowdown. Of course, at the outset, it does sound sane – but then, did he have any solid solution in hand? The answer is plain and simple – NO! No economist seems to have a solution to the chaos they are party to.

Raghuram worked under a corrupt and incompetent government headed by prime minister – yet another extremely qualified economist but ineffective leader – Dr Manmohan Singh. Strange but true, he hardly made a negative remark on the then PM or his cabinet or all the scams it created. Why was this so? This raises a clear question about his regard for the country.

He even declared Demonetization plan to be “inadequate”! So, did he suggest some alternative plan? Answer is conveniently “No”!

Recently a report presented by the Reserve Bank of India suggested that over 99% of the banned notes had returned to the banks. “Eminent” economists like Rajan argued that this proved ineffective. Some others blamed Modi for “absolute irresponsibility”. But is this so? Let us look at the case from a grassroot level. How many people now have bank accounts? As per confirmed estimates, a great many Indians now have access to banking and are able to gain direct benefits from government schemes. When demonetization came – a significant number of black money hoarders disbursed the cash to their relatives and even their domestic workers. Not out of love – but to ensure that the money was worth something in a way. The finance ministry’s tax collection rose to an all-time high. Over two crore people declared income over one million INR! Where do you think these people got their money from?

Any person with common sense can tell that an economy prospers when money changes hands frequently. It fails when it’s hoarded away from government eyes – black money. If there is one significant thing which added to charisma of Modi it was his absolute determination and tenacity to implement any program he believed would benefit his country. The successive victories of his party – BJP – in major states like Uttar Pradesh showed that people were pleased with his resolve. Indian citizens have answered the demonetization drive with their votes in recently concluded state elections. There’s no reason for Modi or BJP to be worried about this and he certainly seems to know this fact.

The opposition, Congress particularly, is most displeased for they’ve lost every state election except Punjab. And the upcoming Assembly election in Karnataka doesn’t seem good for them either. To make an image makeover and look upbeat, the party even asked its dynastic leader – Rahul Gandhi – to make a few trips abroad for media acclaim, as he has failed too often in India to be taken seriously. Congress has run out of its cards. And in one last ditch attempt they’ve decided to rope in all disgruntled compatriots to join force to criticise Modi. Former ministers – Arun Shourie and Yashwant Sinha – are the most notable, but may reflect more personal anger at not receiving a position than any actual wisdom.

Yashwant Sinha was the most successful as finance minister of India under then PM Vajpayee. When India tested its nuclear weapons at Pokhran – a series of international sanctions were sure to cripple India’s economy. But Sinha’s astute financial and economic genius saved the day. Shourie, however, although a very accomplished writer and intellectual, did not do well as minister for disinvestment. Some months ago he was found in the company of the very people he strong criticized in his books – Communists – just to criticize Modi.

It is surprising to see how Sinha is declaring the inconveniences caused by implementation of GST to be a disaster! There can be no smooth rides in government implementation of such extensive plans. Hiccups are natural and course correction policies may be necessary. GST transition has already occurred and the world is lauding the grit and determination of Modi and his cabinet.

Are we suggesting that everything in India is going well economically? Not at all. India has been ruled by incompetent prime ministers through the support of corrupt and nepotistic politicians for decades. A great many things must be fixed, which takes time. The chaos in the global economy is adding to the problems, but India is rising.

Let us not forget that an economy is like that graph in an ECG machine – there’s upward and downward trend always. Problems are part of life and the economy. “Acche Din” of Modi is not to be mocked. He has put a great many things on the right path. Electrification of villages, great roads, railways, entrepreneurship impetus, banking and other strategic initiatives are already making major differences. “Acche Din” or “Good days” are not when problems aren’t there – it’s a day when problems are not over emphasised and solutions are sought and implemented.

These eminent economists have no solutions to offer, only a doomsday scenario to project. You need a person with a sincere and astute determination to lead in such difficult times in the world as to day. Narendra Modi is doing just that and moving the country forward, both domestically and on the world stage

To conclude: such criticism of Modi by these slighted economists won’t last long and is sure to lose steam. So, what new anti-Modi agendas will the opposition resort to next? No doubt new plans are already under way.

 

October 4, 2017

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