India’s GDP growth controversy points to deeper problems over economic advisory in the country..

One expected lots of analysis post Subramaniam’s paper but the choice of words is appalling. After accusing his research of intellectual treason, another economist wrote the following:

The Indian statistical process is robust, independent and continually improving. More can and should be done to strengthen it and its advisory committees but bringing in outside experts who do not understand the economy can be counter-productive.

Ouch!

What is even more worrisome is how the two authors are part of economic advisory. One is part of PM’s Economic Advisory Council and another is one of the several co-authors of PM EAC’ report questioning the analysis. And for all you know, PM’s EAC has people who would be considered as foreign experts. Infact, that is one of the most important criteria for getting economic policy positions in India!

This should not be acceptable. I really do not know why the established media houses agreed to publish such words. Moreover, one expects better judgement for those holding offices of power. Criticise something threadbare but one has to maintain some decorum.

Though, it points to even a larger point. One is increasingly seeing how economic advice is getting politicised. Anyone who becomes an economic adviser to the government is seen as being accountable to the government at power and not to the country at large. The job of the adviser is not seen as providing any economic advice but stand-up for the government at all costs.

Infact, it is fine if governments think that way. What becomes a bigger problem is when advisers also think and signal in the same direction.

Let us imagine that Arvind Subramaniam actually said the opposite using similar analysis: India’s GDP growth rate is underestimated by 2.5%. One is wondering whether EAC and its members would write similar articles criticising the approach? Most likely not and they would have celebrated the paper. But then that is the role of the adviser. To keep guiding on the right path. If AS’s paper follows poor methodology, it should be criticised either way.

Somehow the contract between Principal and Agent has weakened and does not inspire any confidence. This does not augur well for Indian economy at all.

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2 Responses to “India’s GDP growth controversy points to deeper problems over economic advisory in the country..”

  1. Pratik Datta Says:

    short of calling AS “anti-national”, they have alleged all kinds of things… including “charging” him for relying on data provided by a private company! every profession in India seems to be inching towards the advanced stage of decay that the legal profession is in…

  2. Anantha Nageswaran Says:

    A good post.

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