CEA Arvind Subramanian, who once called Modi mediocre leader, efficient in riots, resigns

By Rajiv Shah
Prime Minister Narendra Modi has "lost" yet another topnotch economist, Chief Economic Advisor (CEA) with the Union finance ministry, Arvind Subramanian. Following Arvind Panagariya, who quit the Modi establishment in August 2017 reportedly over excessive bureaucratic interference, Subramanian has resigned, citing "personal" reasons.
Subramanian, it is well-known, was two years ago a victim of a running campaign by BJP Rajya Sabha MP Subramaniam Swamy, who demanded from the government: "Sack him!"
A senior fellow at the prestigious Peterson Institute for International Economics and Center for Global Development, US, and rated among 100 top world thinkers, earlier Subramanian had advised the US on how to do business with India. He has become the third top economist to quit the government, the first one being Raghuram Rajan, who quit as Reserve Bank of India governor in September 2016.
Yet, BJP hard-liner Swamy, while attacking the CEA, referred to a 2013 report in which Subramanian had called Prime Minister Narendra Modi “a mediocre leader, efficient in riots”, adding the CEA had not just stopped here; he even “asked the US to grill India in World Trade Organization.” He added, “Who said to US Congress on March 13, 2013, the US should act against India to defend US pharmaceuticals interests? Arvind Subramaniam! Sack him!!”

Arvind Panagariya

In the 2013 Congressional testimony which Swamy referred to, Subramanian had said, "American firms are increasingly facing implicit but substantial discrimination in India's large and growing market because of India signing (or on the verge of signing) free trade and economic partnership agreements with its largest trading partners that are all major competitors to the US: Europe, Japan, Singapore, ASEAN, and possibly ASEAN-plus 6.”
Subramanian had advised the US that it should “adopt” a “multi-pronged strategy for solving trade conflicts and maximizing the underlying potential”, which include US addressing “frictions especially where Indian policies are demonstrably protectionist... through multilateral (WTO) dispute settlement procedures. The US should not be reticent in this regard."
Before he was made CEA on Jaitley's advise in October 2014, five months after Modi took over, Subramanian had held the view that India should not oppose the World Trade Organization's (WTO's) Trade Facilitation Agreement (TFA), something the country did in 2014. By opposing TFA, he had said, India would be seen as an obstructionist. “A policy that has limited support in the WTO looks weak and lacks legitimacy, and, hence, is unlikely to succeed”, he had added.
While it is belived that Subramanian had strong views on demonetisation and Goods and Services Tax (GST), and these differed from those of Modi, he was instrumental in coming up with some of the most well-researched Economic Surveys for the Government of India, which had critical remarks on the the government's economic policies. Those in the corridors of powder say, he was upset with the government over not keeping him informed about major policy decisions.

Raghuram Rajan

While openly favouring the government, in interviews and chats with journalists, Subramanian left no stone unturned in declaring that he did not agree the way the government was going ahead with policy reforms. Once, on being confronted with a crucial issue related with the Indian economy, the CEA, whose advice should have ideally formed the foundation of the government’s macroeconomic policies, asked, “Why do you want to deprive my memoir of any commercial value?” In an interview to The Financial Times in early 2017, he admitted that he had learnt to watch his step on delicate topics that could upset the Modi government, especially during public interactions.
“I was asked for my views on the beef ban in Mumbai and said jokingly that if I speak on this I’ll probably lose my job — and that went on the front page of The Indian Express,” he told Financial Times. “In that case I was told to be a bit more careful.”
On another occasion, speaking on the impact of social divisions and communalisation on economic development, he said, “The way you react to social cleavages has a critical impact on economic development. India is a wonderful example. What have reservations done, what have they not done, what has religion done, what has it not done illustrates the general principle that these things have a huge impact.’’
Meanwhile, "thanking" Subramanain, Union finance minister Arun Jaitley said in a Facebook post, the CEA was "torn between family commitment and his current job which he considered the best and most fulfilling he has ever done", adding, he was "an advisor", whose job was to "analyse and thinks several steps ahead", adding he was "not a spokesman of the government."
Jaitley continues, Subramanian's "early diagnosis of the twin balance-sheet had led us to adopt the macro-economic strategy of higher public investment in the Budget of 2015-16. He conceptualised JAM (Jan Dhan, Aadhar, Mobile) as a data base for availing public benefits. He contributed to the debate of federalism by conceptualising that the Indian federalism has not merely to be cooperative but also competitive."

Comments

NPNAIR said…

No bother.We are going to get an efficient PM Rahul Gandhi.He will manage all economies !!

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