Letters: Original reformer

I remember KN Raj as Professor of Monetary Economics at Delhi School of Economics. He was one of the youngest professors and was immensely popular among his students, being not very much older than most of us. A bachelor, he welcomed students to his home, fed them and introduced them to the art of conversation and ideas while freely sharing his collection of books.

Raj was a great teacher of monetary economics. His lectures demanded total concentration as he went step by step, building the edifice of his subject. His PhD thesis at London School of Economics had been on the monetary policy of RBI, still a classic exposition. He had written the introductory chapter to the First Five-Year Plan when he was deputy economic adviser at the Planning Commission. Using the sketchy data then available, he estimated savings and investment in 1950-51 at 5 per cent of national income. In keeping with his philosophy of “hastening slowly”, he evolved a target of 7 per cent by 1955-56, 11 per cent by 1960-61, 16 per cent by 1965-66 and 20 per cent by 1970-71 in order to improve growth and employment. The savings targets were spectacularly achieved. But growth and poverty reduction were not.

His subsequent work showed why. In 1970, when asked by the government to review the steel industry, people who had labelled him a leftist, were taken aback when he recommended that all controls on steel be removed and the steel industry allowed to find its own path to growth and profits. This was the first occasion that such a recommendation had been made, to move away from the “command and control” economy. His writings on land reforms and agricultural economics were insightful and practical: “How the markets are structured; which of them are the crucial ones; and how exactly they function and interact with each other; how they are likely to differ not only from one phase of historical evolution to another but even among different regions in an agrarian economy.” His best years were the 18 that he spent as professor in Delhi and his 33 or so after he abandoned Delhi to set up the Centre for Development Studies (CDS) in Thiruvananthapuram. At CDS, he pioneered work on decentralised development in Kerala. He and Joan Robinson coined the phrase “sedimented employment” to describe long-term results from watershed programmes that were truly sustainable. CDS also introduced to the world the “Kerala model” of excellent human development parameters (literacy, life expectancy, low infant mortality, etc.) even when there was little economic progress. The secret was empowering women along with concerned governance.

Raj was an economist in the tradition of many from the Delhi School — VKRV Rao, BN Ganguli, Amartya Sen, Sukhomoy Chakravarty and others who saw economics as a tool to improve the life of the poor and downtrodden. For KN Raj, policies that helped the poor were the right ones; those that would not were wrong.

SL Rao, Bangalore