The Union finance ministry's new chief economic advisor, Dr Rakesh Mohan, now temporarily dubbed "advisor to finance minister" is by no means a "Keynesian" economist, but he has one thing in common with John Maynard Keynes, the father of modern macroeconomics. His spouse is a dancer!When Professor Jagdish Bhagwati derided a swadeshi-espousing economic advisor to the Bharatiya Janata Party and said: "If he is an economist, I am a Bharatanatyam dancer", he was ticked off by the Bharatanatyam dancer Rasika Mohan for such a poor opinion of her craft! Clearly, Dr Mohan is not an economist of the dancing kind. He has his feet firmly on the ground.
Having first trained as an engineer, Dr Mohan went to the United States and pursued a doctorate in economics, before joining the staff of the World Bank. Returning to India in the early 1980s, he first joined the Planning Commission where he worked extensively on urban development, publishing highly influential books on urban economics.
Dr Mohan then moved to the ministry of industry as an economic advisor and did much of the spade work for the new industrial policies initiated in 1991-92. This was the high noon of economic reform and Dr Mohan found himself in the `core group' of the architects of economic reform in government, along with Mr Montek Singh Ahluwalia and Dr Jayanto Roy in the commerce ministry and, subsequently, Dr Shankar Acharya in the finance ministry.
In 1995 Dr Mohan moved from the industry ministry to head the National Council of Applied Economic Research (NCAER), where he began to focus on the economics of infrastructure development. The report of the Rakesh Mohan Committee on Infrastructure became a landmark document in the evolution of thinking on economic policy issues. During his tenure at NCAER, Dr Mohan not only provided leadership for the work on infrastructure sector reform, including studies of the power sector, roads and railways and shipping and port reform, but also strengthened NCAER's on-going work on macroeconomic forecasting and analysis of human development and consumer expenditure surveys.
Dr Mohan helped increase NCAER's profile by publishing its research output in sleek and elegant volumes, with the visual and textual appeal of World Bank and company annual reports, and by organising a series of national lectures by eminent economists and policy makers. If Dr Mohan can impart some of his enthusiasm for good quality production and printing to his immediate job, one can look forward to a more elegantly written and sleekly produced Economic Survey.
The production of the annual pre-budget Economic Survey is the first important assignment Dr Mohan will now have to handle. He will undoubtedly be involved in the pre-budget discussions in the finance ministry. It is not difficult to guess the ideas he will bring to the table on fiscal policy. In his recent writings Dr Mohan has emphasised, like his predecessor Dr Shankar Acharya, the central importance of prudent fiscal management. While he does not see spending on government salaries and administration as the principal culprit, since on this score India remains within comparable international parameters, he is deeply concerned about the burgeoning subsidy bill and the recent sharp increase in defence spending (this despite being a member of the National Security Advisory Board).
Dr Mohan appreciates the importance of public investment in infrastructure and here he departs company from the more rabid free-market enthusiasts who reject any sort of government spending, even growth-augmenting capital expenditure. Dr Mohan is a growth enthusiast, but also worries about inflationary pressures. As a much younger professional he will always defer to the seniority and maturity of the Governor of the Reserve Bank of India, Dr Bimal Jalan, though he will always speak his mind, as is his wont.
Dr Mohan will be called "advisor to the finance minister" till his predecessor, Dr Acharya, who still holds the post of chief economic advisor and is on extended leave, finally resigns or retires. It is only then that the Union Public Service Commission can advertise and select a new CEA. It is only after these formalities are completed that Dr Mohan will find his name on the wooden panel that adorns the CEA's room in North Block, containing the names of all his illustrious predecessors-names such as Dr Ashok Mitra, Dr I G Patel, Dr Manmohan Singh, Dr Nitin Desai, Dr Deepak Nayyar, Dr Bimal Jalan and the CEA with the longest tenure of nine full years, Dr Shankar Acharya.
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.