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Vimarsha, VIF’s monthly series of talks, was held on 18 Dec 2014 with Dr. Rathin Roy, Director & CEO, National Institute of Public Finance and Policy (NIPFP) and Member, Seventh Central Pay Commission, Government of India, speaking on the ‘Science of Economics as Applied to India’. A large audience, comprising many senior retired bureaucrats and military veterans among other informed citizenry, attended the event. General NC Vij, Director VIF, introduced the guest speaker and the subject to the audience while Amb Prabhat P Shukla, Distinguished Fellow VIF, presided over the evening session.

General Vij presented a brief overview of the state of Indian economy over the past six months. He said going by the present indicators, the Indian economy appears to be back on track. However, he stressed greater structural reforms are still needed, especially in infrastructure, manufacturing, insurance etc, to reboot the economy.

Dr Rathin Roy’s talk focused on the nature of economy and how it affects economic policies in India. By his own admission, Dr Roy belongs to the growing class of economists who revolt against globally established economic norms and principles, perpetuated by institutions such as IMF and World Bank. He said in his speech that academic economists, who are often fed on imported economic logic, are leading the government to formulate skewed policies which not only affect the economic progress of the nation but also influence to a great extent the economic decision making of the people. While he stressed on the need to synthesize laid down economic principles with local conditions, he also asked global financial institutions including the rating agencies to be more transparent and accountable with their predictive analysis. Dr Roy presented four examples from four different domains to buttress his arguments.

Lending his support to Dr Roy, Amb Shukla complimented him for giving a refreshingly different account of how to micro-manage economic affairs of the state. He also said while the purist economists remain prisoners of orthodoxy, the media is not doing a fair job of economic reporting either. While remaining fixated on issues like market sentiments et al, the media often ignores the real economic issues facing the country. During the final session, lots of insightful questions were raised by members of the audience. A few of the questions related to the lack of communication between economists and the government, linking human growth to economic growth and drawing upon traditional economic wisdom of the country. It was also brought out by a member of the audience that economic policies are often the result of political considerations with little economic prudence behind them.