Archive for November 19th, 2018

RBI and Government spat: What was once a ‘joint family’ is fighting like two nuclear families today…

November 19, 2018

Interesting bit of history by P Vaidyanathan Iyer in Indian Express.

The Government is today seen as raiding the central bank’s reserves but 25 years ago, it had agreed to provide from its own Budget when the Reserve Bank of India was staring at the prospect of a loss for probably the first time in its history. This story of a “joint family approach”, being shared in a small circle of past directors of the RBI Central Board, holds much relevance in the context of the current debate on the optimal level of reserves the Reserve Bank must hold.

“Joint family approach” is perhaps the right way to put this Govt vs RBI frictions over the years. The frictions were mostly settled within the house with an odd friction or two reaching the media.  As several generations have passed and this institutional history has been lost, the  joint family has given way to two nuclear families with frictions out in the open.

Read the article for more details. It tells us how RBI settled the losses on NRI deposits using the very reserves and when reserves were inadequate with its profits. But then this meets the overall point of having these reserves at the first place: to use them in crisis. Why the government wants them now without any crisis really is something not very clear.


Revisiting Bombay Plan and its message

November 19, 2018

A new book edited by Sanjaya Baru and Meghnad Desai  on Bombay Plan has been released (my earlier post on the plan here). It has essays from PS Lokanathan, AMal Sanyal, Gita Piramal, Omkar Goswami and so on. 

Here are links discussing the book:

Mid Day reports what prompted Mr Baru to write the book? Most current generation of business leaders had not heard of the plan!

“When I joined FICCI as secretary-general in 2017, I was surprised to discover that not many of FICCI’s leaders had even heard of the Bombay Plan. It was after all the most important policy intervention by FICCI’s leaders before Independence. So I felt it was time to resurrect the document,” said Baru, who was previously media advisor to Dr Singh, of why he decided to pursue the document again.

When Baru approached Desai, who sits as a Labour Peer in the House of Lords, he immediately decided to come on board. “I have read all the various plans, but there was no doubt that the Bombay Plan was the most detailed,” Desai says, adding, “Although it was denounced by the Left as Capitalist plot , it was much less ideological than the Gandhian Plan or the People’s Plan. It was a professional job, when except for the USSR, national planning had not been discussed anywhere else.”

Desai says that while the Five Year Plans may have been more socialist, the Bombay Plan was more people-centred. This is visible in its strong focus on nutrition, education and sanitation. “The planners have laid down minimum living standards on the basis of about 2,800 calories of well-balanced food a day for each person, 30 yards of clothing and 100 square feet of housing; and they also outline the minimum needs for elementary education, sanitation, water supply, village dispensaries and hospitals,” Lokanathan had written.

“In that sense the Bombay Plan was more ‘socialistic’ than the Nehru-Mahalanobis Plans. Even now there isn’t adequate recognition in India of the importance of investing in human capital compared to East Asian nations,” says Baru.

Desai hopes that the current crop of businessmen learn from their predecessors. “They may be richer, but they are much less powerful than the Bombay Plan [authors], who were not crony capitalists,” he says.

This is so Indian!

But then it is not just about fading memories alone. The way same business houses criticize the planning era is sheer double standards of sorts! For a very long time, Indian business history is mainly about pleasing the current political masters. This has barely changed today. It is all about convenience and power.

Polish Economists in Nehru’s India: Making Science for the Third World in an Era of De-Stalinization and Decolonization

November 19, 2018

Interesting paper by Małgorzata Mazurek of Columbia University (HT: Prof Srinath Raghavan).

Between 1956–68 economic expertise became Poland’s key export product in the decolonizing world. India, a broker of social science in the Cold War, became a geopolitical gateway for Polish economists’ spread of developmental thinking that revived heterodox Marxism and peasant studies. In this article, Małgorzata Mazurek investigates epistemic and intellectual effects of Polish – Indian encounters and how they evolved separately from Soviet Third World politics. Mazurek argues that during de-Stalinization and decolonization, failures and obstacles to planning and land reforms came to be seen as a common ground between eastern Europe and South Asia. This shared perception also revived the historical legacy of central and east European social science, which was internationalized in new ways both because, and in spite, of the Cold War.

Never knew that Prof Michal Kalecki and Oscar Lange played such a central role in India’s planning.

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