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Jayanta Roy: A circle of professionals

Remembering the early days of brain circulation between multilateral organisations and India

Jayanta Roy 

Jayanta Roy

Economic policymaking in India has continuously benefited from the return of experts, especially from the World Bank and the International Monetary Fund (IMF), to economic advisory jobs in the Government of India, or to think-tanks and institutions in India. This trend started in the 1970s, and accelerated during the Rajiv Gandhi era. At present, only a handful of such externally-recruited experts are holding coveted jobs in the government.

I joined the World Bank as a Young Professional in 1972. I distinctly remember that apart from learning how a multilateral development policy institution works, I was able to find an atmosphere where during coffee breaks and lunches, I could discuss the Indian economic scene with top India experts. I remember the group that consisted of former officials of the Reserve Bank of India (RBI), Government of India (GOI), and Indian academia, and some of us who were all anxious to leave the well-paying job and serve the government. The former included Deena Khatkhate, V V Bhatt, Kalyan Vaidya, Vinod Dubey, Raja Chelliah, A Vaidyanathan, Madhu Joshi, Suresh Tendulkar, Sarwar Lateef, Ravi Gulhati, Mrinal Datta Chaudhuri, Raj Krishna; and the latter had Bimal Jalan, Arun Shourie, Montek Singh Ahluwalia, D C Rao (who served as Adviser to the RBI Governor), Shankar Acharya, Suman Bery (who followed Mr Rao in the RBI), Manmohan Agarwal (he joined Jawaharlal Nehru University), and Isher Ahluwalia (she went to CPR). The 1970s group was expanded in the 1980s to include Rakesh Mohan, Arvind Virmani, and Surjit Bhalla (who was too independent-minded to work for the government, and started his own investment company), and in 1990s to Rajiv Lall.

The 1970s were not days when communication was easy. There was no internet, phone charges were exorbitant, travel was expensive, and the only way we kept up on developments in India were through old copies of Indian papers in the Indian Embassy, from radio, and mostly from visitors from India. India did not feature at all in any section of the US media.

We were a wonderful bunch that shared every tit bit of information we had. I remember the long lunches we had over dosa at Siddharth's, which was a block from the White House, discussing India. Some of us had just missed Mr Jalan, who had left to take over as Economic Adviser, Industries Ministry.

Most of us returned to India. Mr Shourie left for the Planning Commission, returned back to the World Bank, and then went back and joined The Indian Express. I left in 1977 and joined the Planning Commission. Mr Rao, Mr Ahluwalia, and Mr Acharya left around the same time. For personal reasons, I returned to the World Bank in 1980, and went back as economic advisor, commerce, in 1989. I was so thrilled with my Indian experience that I encouraged, while I was in Washington, several bright Indian stars in the World Bank to return to India - Rakesh Mohan, Arvind Virmani, Mr Bhalla, and Partho Shome. Mr Mohan and Mr Virmani followed me and joined the Planning Commission. Mr Shome took over as Director of National Institute of Public Finance and Policy.

This trend did slow down later on, since the GOI downplayed the role of external experts as advisers. But still, we had Mr Bery take over as Director of National Council of Applied Economic Research, Ashok Lahiri, as economic advisor, Finance and later chief economic advisor in the same ministry, and Mr Lall as the chief executive of IDFC. In the current government, all three key externally-recruited advisers had spent some time either in the World Bank like Arvind Panagariya, or in the IMF like Raghuram Rajan and Arvind Subramanian.

Things were very different for us in the 1970s. We had a coveted, well-paying and permanent job with perks like First Class/Concorde travel. We were all star performers in the World Bank. Mr Ahluwalia was the youngest Division Chief; Mr Rao was the lead author of the Bank's first World Development Report, and Mr Acharya followed him the following year. I led the economic work of the Bank's first Structural Adjustment Loan in March 1980 to Turkey.

We all went back as economic advisors at Rs 2,500 a month, which was an iota of our salary in the Bank. For all of us, to serve the country outweighed the financial sacrifice. Working on very successful countries in the Bank, we all felt that India was operating much below its economic potential. It was a challenge for us to transfer our cross-country experience to Indian economic policymaking to help India reach its potential.

Things are very different now. India has prospered over the years; and the salary scale in GOI has jumped several folds. Nevertheless, all current returnees decided to work in India giving up their coveted jobs... and still at a great financial sacrifice. They have the same pressing urge to help India become a major global player.

Did we make a real impact?
I think we did. The 1991 reform team consisted of Mr Ahluwalia (secretary, commerce), myself (economic advisor, commerce), Mr Mohan (economic advisor, Industries) and Mr Virmani (economic advisor, finance). Mr Acharya was not present when the reform was announced, but had helped shape the programme before he returned briefly to the World Bank. The other key member of the reform team was Venu Reddy, who served as advisor to both the World Bank and IMF's Indian executive director.

Why were we useful?
We all had our roots in India; all of us were top students in our schools and colleges in India; and most importantly, we kept in touch with Indian developments, and came armed with the best international experiences in economic policymaking. For example, I was able to transfer my experience in Turkey to frame the trade reform in India. Turkey suffered from the same problems prior to the 1980 reforms, as we did before 1991 - massive trade transaction costs, heavily protected economy, diabolical foreign exchange control, overvalued lira, and the most complex import clearance system. And within a year of implementing a bold reform, overcame a deep economic crisis.

But credit must also go to the GOI for appreciating this beforehand and placing well-qualified Indians in key advisory positions in economic ministries. This is in sharp contrast to the situation in the last decade, when the economic advisor's position in most economic ministries has been downgraded.

We badly need to reverse this situation and go back to recruiting top economists as economic advisors in commerce, Department of Industrial Policy and Promotion, NITI Aayog, energy, Ministry of External Affairs, and in the Prime Minister's Office. We should, as before, let the Union Public Service Commission select the most qualified candidates from a carefully chosen short-list of best internal and external candidates.

India is in desperate need of seasoned economic advisors to carry forward the long overdue next generation of reforms.

(This was written purely based on my present recollections of the 1970s. I may have left out some important people from the list cited, or got some facts about individuals slightly misplaced)

The writer was economic advisor in the Union commerce ministry

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First Published: Sat, November 28 2015. 21:50 IST