Wednesday, Jul 18, 2018 | Last Update : 12:59 AM IST

Exodus of advisers lead to protectionism

REUTERS
Published : Jul 13, 2018, 12:57 am IST
Updated : Jul 13, 2018, 1:03 am IST

A spokesman for the finance ministry declined comment. The prime minister’s office did not reply to requests for comment.

Prime Minister Narendra Modi (Photo: PTI/File)
 Prime Minister Narendra Modi (Photo: PTI/File)

New Delhi: When Indian Prime Minister Narendra Modi took power in 2014, he leaned on three Indian academics who had predominantly worked in the US to drive a liberal, globalised economic policy.

Now, as Modi faces a tough general election next year to retain office, the last of them has quit.

At least a dozen government officials, policy advisers and members of BJP told Reuters that policy making has mostly been handed over to Modi’s own office and to a coterie of right-wing and nationalist economists.

The departures of the three economists underline the administration’s rejection of free trade and open market approaches to policy in favor of protecting domestic industries and farmers, officials and academics said.

Modi’s economic outlook is now a throwback to India’s inward-looking policies of earlier years, they said. And it appears similar to US President Donald Trump’s agenda to support domestic industry, raise import tariffs and put restrictions on foreign companies, they said.

A spokesman for the finance ministry declined comment. The prime minister’s office did not reply to requests for comment.

Raghuram Rajan, who was retained by Mr Modi as governor of the Reserve Bank of India in 2014, left when his contract ended in 2016. He returned to the University of Chicago, where he is a professor.

Arvind Panagariya, vice chairman of the Niti Aayog,  quit in 2017 when his sabbatical leave from Columbia University ran out.

And last month, India’s chief economic adviser Arvind Subramanian, who was formerly with IMF, announced he would quit to spend more time with his family and in research and writing.

“We expect that with the exit of Arvind Subramanian, the Modi government will listen to domestic experts,” said Ashwani Mahajan, head of Swadeshi Jagran Manch (SJM), a nationalist group linked to RSS, the ideological parent of BJP.

“The country would not lose anything if these foreign economists leave the country,” he said. “Nation building cannot be done by people on sabbatical leave.”

India’s problems had to be understood by advisers “connected to the soil”, he said adding that development in domestic terms meant providing basic necessities, health, education, housing and a reasonable amount of assets.

The Manch is critical of opening up the economy to foreign investors, and has opposed government plans to privatise Air India and the acquisition of e-commerce firm Flipkart by Walmart

Tags: economists, finance ministry, donald trump