After being a hard-boiled academician for more than three decades, Cornell University Professor Kaushik Basu took a plunge into the cauldron called government when he became Chief Economic Advisor in late 2009. This was the year the UPA returned to power much against expectations. It was also a time when the 2008 global financial crash was beginning to be felt in the emerging economies. Basu’s term lasted till 2012, when India had to pump in a massive stimulus to maintain growth, leading later to inflation and stuttering growth.
After his stint with the government, just when Basu was preparing to go back to the quiet world of academia, he was offered the post of World Bank Chief Economist.
But one hardly finds any mention of them in the book and the reason Basu gives is he did not personally witness any act of corruption, adding, “while there is a lot of corruption in the government, its incidence is not as high as many outside observers believe”.
In fact, his view on corruption got Basu into a bit of trouble with the Prime Minister and Finance Minister. He started a Working Paper series in the Finance Ministry inviting economists and researchers to send academic papers involving policymaking. Basu wrote a paper on corruption where he said in small corruption offences, the ‘bribe giver’, who are usually common people, should not be penalized for giving bribes to get a ration card or a driver’s license.
This paper was widely reported in the press and predictably raised the hackles of the political class. Ironically, the Left parties were most incensed and wanted the paper to be taken down from the Finance Ministry web site. Basu was willing to even put in his papers if either the Prime Minister or the Finance Minister had made such a request. To their credit they didn’t, much to Basu’s relief.
Another interesting incident recounted in the book was when Basu gave the Carnegie Endowment lecture in the US where he made some remarks on reforms in India, which were construed in the press as proof of the then government halting reforms till the 2014 elections. This again predictably created a storm in New Delhi.
Apologetic reporter
When Basu in his defence said that it was a case of misreporting, Pranab Mukherjee, the then Finance Minister, was convinced and told Basu to call up the reporter concerned and give him a piece of his mind. When Basu called up the reporter, the reporter was so apologetic, having got enough grief from his bosses, that it was Basu who ended up consoling him!
Another major government decision taken during Basu’s tenure was the controversial “retrospective tax” law which was brought in to counter the adverse Supreme Court judgments in some high profile tax cases against some MNCs. Basu claims that he was kept out of the loop on this decision and wonders whether that was because he would have opposed it. For the record, this law was recently amended after nine long years.
Basu has great admiration for Manmohan Singh, Pranab Mukherjee and Arun Jaitley. He is almost in awe of Manmohan Singh. But it is his glowing views on the Gandhi-Nehru family that are bound to raise eyebrows. About Rahul Gandhi, he says, “… he has no great interest in power, which is a rare, good quality in a politician. He is also a person of ample basic goodness.” Goodness, maybe, but power?
Basu had his skirmishes with then high-profile NAC over making everything into a right. He says, “…to enshrine something as a right, when you have no way to ensure that the right can be fulfilled is to diminish the value of the right.” Though he supported the right to food law, he opposed right to work.
The Washington years
As World Bank Chief Economist Basu led a peripatetic life travelling to countries such as Samoa, Senegal, Tajikistan, Peru and Estonia.
There are some amusing incidents recounted here – Tajikistan’s Deputy Prime Minister singing a Raj Kapoor song (what’s with these ex-Soviet Republics and Raj Kapoor?) at a party; a meeting with Bill Gates at a restaurant in Washington, where Gates confessed to Basu that his favourite Indian politician was Nitish Kumar. Basu tried to get Gates enthused on the concept of “Living Life Index”. But the index “meant to study bureaucratic hurdles faced in everyday life” was stymied by the bureaucratic hurdles in the World Bank!
Basu also had a chance to meet the legendary Daniel Ortega of Nicaragua, who led the Sandinista revolution back in the 1970s, where he mused on ”how hard it is live up to the idealism of a genuinely progressive revolution”. Basu wanted to ask him about his fall from grace, but discretion got the better of valour.
On the ideological spectrum, Basu considers himself firmly on the Left. This will surely make some traditional Left leaders in India uncomfortable – a Leftist World Bank Chief economist? But to Basu’s credit, he attempted to veer the World Bank away from the much-maligned “Washington Consensus” and worked on the “Stockholm Statement” which emphasized, “… that economics was not just about free trade, deficit control and GDP growth. Inequality matters, for a better society and also an end in itself”.
A minor quibble. William Stanley Jevons, who brought about the “marginal revolution” in economics lived and worked in the 19th century and not in 1960 as mentioned on Page 342. Printer’s Devil?
What shines through in the book is that it is written with great humour, much of it self-deprecating. But one gets the impression that Basu has held back more than he has revealed – especially on his New Delhi days.
Title: Policymaker’s Journal: From New Delhi to Washington D.C.
Author: Kaushik Basu
Publisher: Simon & Schuster India
Price: ₹699