At any other time, an observation by the top economist in the finance ministry to the effect that Indian businesses are cry-babies who say, “papa, bachalo,” and run to the government (ie “papa”) at the slightest sign of trouble, would have rung alarm bells at every boardroom.
Not this time, not after Krishnamurthy Subramanian, chief economic advisor (CEA) to the finance minister, said companies should pull themselves up from recession by their own bootstraps, instead of waiting for sarkari handouts, liquidity boosts, or day-to-day reforms.
His comments have at best, been met by mild disdain as the mutterings of a North Block ‘newbie’, too callow to fathom the complexities of India Inc or policy-making. At worst, a lightweight advisor is messaging a lightweight minister’s no-can-do in the middle of a perfect economic storm: “Have a pleasant trip. The crew has jumped ship.”
CEA Krishnamurthy’s is a soul torn asunder by opposing forces.
How CEA Subramanian Was Dug Out Of Obscurity
Subramanian was dug out of obscurity and appointed to the CEA’s job eight months ago, after five months of fruitless search for a better successor to predecessor Arvind Subramanian. During these months, the CEA has done everything possible to establish his stature as a ‘flake’.
Krishnamurthy’s is a soul torn asunder by opposing forces. One is a desire to crunch numbers, copy-paste homilies by Friedrich Hayek and Deng Xiao Ping (the same quote about crossing river, feeling for stones – twice, in the same document) and brandish fads like behavioural economics, of little proven use in policy-making. The other is a tail-wagging fervour to keep his saffron political masters in good humour with vacuous Puranic references apropos of nothing.
Suspended between recession and Ram Rajya, North Block and its hapless occupants take refuge in Twitter ‘Trishanku’.
The Economic Survey, 2018-19, was thus, a farrago of ‘hip’ economics and theological babble about Matsanyaya — a mythical era of big fish gobbling up smaller fry — an imaginary ‘Hindu’ golden age for women populated by the likes of the enlightened Gargi, Lopamudra and Maitreyee, and religious dictums against debt default.
Suspended Between Recession & ‘Ram Rajya’, No Diagnosis Of Economic Crisis
That this hotchpotch failed to diagnose – forget prescribe a cure for – the crisis in India’s economy and finance, surprised nobody. Suspended between recession and Ram Rajya, North Block and its hapless occupants take refuge in Twitter ‘Trishanku’.
Thus, on August 5, soon after New Delhi’s annexation of the state of Jammu & Kashmir, Subramanian tweeted, “Maa Sharada, worshipped as Kashmirpuravasini, would be so pleased that the place where She resides fully integrated with the rest of the country today. That it happened on Nagapanchami is no coincidence...”
CEA Subramanian has demonstrated his yen for marrying the preposterous (Kashmir Puravasini with the dissolution of J&K) with the vapid (Indian’s are affected a lot by cultural and social norms).
If that missile, with its Upanishadic warhead directed at Constitutional law and politics hasn’t flattened you, here’s another example of Subramanian’s virtuoso gift for the banal (20 July): “Behavioural Economics is important for India to tap into, because our behaviour is affected a lot by cultural and social norms...”
Umm-hmm. The penny drops; no way, the buck stops here.
A Total Policy Flop
Two years after being proved a comprehensive policy flop, driving millions of small and medium businesses out of pocket, here is the CEA’s Twitter tuppenny on the goods and services tax (GST): “GST provides a good template for how key policy reform requires 1. risk-taking ability and 2. concessions to those getting affected negatively. Learnings are relevant in many other areas involving centre and states, such as labour laws and agriculture…”
Thus, in less than a year at North Block, Subramanian has demonstrated his yen for marrying the preposterous (Kashmir Puravasini with the dissolution of J&K) with the vapid (Indian’s are affected a lot by cultural and social norms).
Nevertheless, he has a head for heights: standing at the edge of an economic abyss, he says blithely, that Indian business is “30 years old”, and this grown-up can’t go rushing to “papa” sarkar for bailouts.
Subramanian Could be the Last Straw to Break the Capitalist’s Back
Well, Indian business is considerably older: the House of Jagat Seth managed the subcontinent’s currencies 600 years ago. We were trading with Europe along the overland Silk Route more than a millennium in the past.
The flip side, about state support for business and vice versa, is as true today as it was when business first started – globally. It was the job of local rulers, from Beijing to Constantinople, Dilli to Zanzibar, to maintain infrastructure, provide security, safe passage, freedom from petty harassment, settle disputes, keep finance flowing and, yes, earn the respect of farmers, manufacturers and merchants big and small. Only that would earn kings and rulers the taxes to afford standing armies, bureaucracies and personal pomp.
India’s government today has failed to deliver on its obligations to farmers, business and bankers. It clings onto its increasingly unearned ‘right’ to tax. For more than five years, businesses had tolerated “papa's” irresponsible neglect like a stalwart. But Subramanian could be the last, schmaltzy straw that breaks the capitalist’s back.
(The writer is a Delhi-based senior journalist. He tweets @AbheekBarman. This is an opinion piece and the views expressed are the author's own. The Quint neither endorses nor is responsible for them.)
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