After being a staunch academician for more than three decades, Cornell University professor Kaushik Basu plunged into the cauldron called government when he became chief economic adviser at the end of 2009. It was the year in which the UPA has returned to power well against expectations. It was also a time when the global financial crash of 2008 was beginning to be felt in emerging economies. Basu’s tenure lasted until 2012, when India had to inject a massive stimulus to maintain growth, which later led to inflation and choppy growth.
After his stint in government, just as Basu was preparing to return to the quiet university world, he was offered the post of Chief Economist of the World Bank.
Decision makers journal is essentially a diary that Basu kept during his years in New Delhi and Washington. It does not go into the details of policy making here, as was discussed in a previous book. These are impressionistic notes that Basu made every night after a hectic day at work. The period in which the author was chief economic adviser was also marked by corruption scandals – Commonwealth Games, 2G, coal affair – were among the most prominent.
But there is hardly any mention of it in the book and the reason given by Basu is that he has not personally witnessed any act of corruption, adding: “Although there is a lot of corruption within the government, its incidence is not as high as outside observers believe ”.
In fact, his take on corruption got Basu in some trouble with the Prime Minister and the Minister of Finance. He launched a series of working papers at the Ministry of Finance inviting economists and researchers to send in academic papers involving policy development. Basu wrote an article on corruption in which he said that in petty corruption offenses, “bribers”, who are usually ordinary people, should not be penalized for paying bribes. de-vin to obtain a ration card or a driver’s license.
This document was widely reported in the press and, as one would expect, raised the thorns of the political class. Ironically, the left-wing parties were the most enraged and wanted the document removed from the Finance Ministry website. Basu was even ready to put in his papers if the Prime Minister or the Minister of Finance had made such a request. To their credit, they didn’t, much to Basu’s relief.
Another interesting incident recounted in the book took place when Basu gave the Carnegie Endowment lecture in the United States, where he made some remarks on the reforms in India, which were interpreted in the press as proof of the shutdown. reforms by the then government until the 2014 elections. This again predictedly created a storm in New Delhi.
When Basu, in his defense, said it was a case of misrepresentation, then Finance Minister Pranab Mukherjee was convinced and told Basu to call the journalist concerned and give him his opinion. When Basu called the journalist, he apologized so much, having enough grief from his bosses, that it was Basu who ended up consoling him!
Another important government decision taken during Basu’s tenure was the controversial “retrospective tax” law that was passed to counter unfavorable Supreme Court rulings in some high-profile tax cases against certain multinationals. Basu claims he was kept out of this decision and wonders if it was because he would have opposed it. For the record, this law was recently amended after nine long years.
Basu has great admiration for Manmohan Singh, Pranab Mukherjee and Arun Jaitley. He is almost in awe of Manmohan Singh. But it’s his glowing views on the Gandhi-Nehru family that are sure to raise eyebrows. About Rahul Gandhi, he says: “… he does not have a great interest in power, which is a rare and good quality in a politician. He is also a person of great fundamental goodness. Kindness, perhaps, but power?
Basu had his skirmishes with the then high-profile NAC to make everything a right. He says, “… to enshrine something like a right, when you have no way of making sure that the right can be fulfilled, that is to diminish the value of the right. Although he supported the right to food law, he opposed the right to work.
The Washington years
As Chief Economist of the World Bank, Basu has led an itinerant life traveling to countries such as Samoa, Senegal, Tajikistan, Peru and Estonia.
There are some funny incidents recounted here – the Deputy Prime Minister of Tajikistan singing a Raj Kapoor song (what are those ex-Soviet republics and Raj Kapoor?) At a party; a meeting with Bill Gates at a restaurant in Washington, where Gates confessed to Basu that his favorite Indian politician was Nitish Kumar. Basu tried to get Gates excited about the concept of “Living Life Index”. But the index “intended to study bureaucratic obstacles encountered in everyday life” was blocked by the bureaucratic obstacles of the World Bank!
Basu also had the chance to meet the legendary Daniel Ortega of Nicaragua, who led the Sandinista revolution in the 1970s, where he reflected on “how hard it is to live up to the idealism of a truly progressive revolution ”. Basu wanted to question him about his disgrace, but discretion prevailed over valor.
On the ideological spectrum, Basu considers himself resolutely on the left. Surely this will make some traditional left-wing leaders in India uncomfortable – a left-wing chief economist at the World Bank? But to Basu’s credit, he tried to deflect the World Bank from the much maligned “Washington Consensus” and worked on the “Stockholm Declaration” which emphasized “… that economics is not just about free trade, deficit control and GDP growth. Inequality matters, for a better society and also an end in itself ”.
A little chicane. William Stanley Jevons, who brought about the “marginal revolution” of the economy, lived and worked in the 19th century and not in 1960 as mentioned on page 342. The Devil of the Printer?
What shines about the book is that it is written with a lot of humor, a lot of self-mockery. But it feels like Basu withheld more than he revealed – especially during the New Delhi era.
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Title: Policymaker’s Journal: From New Delhi to Washington DC
Author: Kaushik Basu
Publisher: Simon & Schuster India