Life in the heart of Indian government

Guest columnist Kaushik Basu, who has been appointed chief economic adviser to the Indian government, bids farewell and explains why he took up his new job.

Kaushik Basu's new office in North Block (right)

It is less than a month since I relocated to Delhi to be chief economic adviser to the government, in the ministry of finance.

The offer came out of the blue and I agonised over it.

As a researcher I did economics for the love of aesthetics - not for relevance.

In defence, I will simply say that that is the only way to do good research.

The primary motivation that drives a researcher is a creative urge, the urge to unearth beauty and order, be it in nature, society or the chaos of the market.

I did not expect the level of professionalism and commitment to work that I encountered in my ministry Send your comments on Kaushik Basu's article

If I moved from the ivory tower to the world of policy and politics, I would not only be working in a setting totally alien to me - the daunting world of Indian bureaucracy - but I would have to reorient my objective, for one thing was clear to me: if I did make this major move, it would be to get something worthwhile done for society, to give my absolute best towards creating a better India.

This is an intimidating objective where failure is more likely than success. The only consolation was what a colleague at Cornell laughingly told me - "if you fail, you can come back and write a sizzler on Indian politics and policy".

I dithered for a day or two and took the plunge.

In early December I moved to my high-ceilinged, Raj-era office in Lutyens' Delhi, the North Block. I had landed in the belly of the beast that I had studied for so long from outside through the analyst's neutral lenses.

Harrowing

The first week was harrowing.

My in-tray reached for the ceiling till someone pointed out that on my right was an out-tray.

Questions concerning the economy came at rapid fire from parliament and from policy-makers.

I was asked, for example, if allowing futures trading in food created inflationary pressure on the spot market price of food.

This is the kind of question on which I would love to spend some months thinking and reading and then write a paper. Here I had 24 hours to respond.

For all the bewilderment of the first week, there was one pleasant surprise.

'This job is to give my absolute best towards creating a better India'

I did not expect the level of professionalism and commitment to work that I encountered in my ministry.

It is entirely possible that this is a recent phenomenon and special to Delhi, but the level of individual industry that I have seen in my first weeks is entirely on a par with or even higher than the best private sector firms.

In addition, the top brass combines this professionalism with an unexpected unassuming air. This augurs well for the Indian economy.

Let me clarify, I have not changed my mind about the slowness of our bureaucracy.

There is enough hard data to show that we take too long to clear the permits needed to start a new business, we take too much time to close a business that has gone bankrupt and our procedures for enforcing contracts are too cumbersome.

I believe that to streamline these and make them faster will be like starting fast trains between cities, building better ports, providing ample electricity. It can have a magical effect energising the entire economy of India.

What my first weeks of the view from within has convinced me is that the problem lies with the system and not with the individuals who comprise it.

It is like ace drivers caught in a traffic jam; a huge waste of a valuable resource.

Enabler of enterprise

We have to re-examine the structures of decision-making in our bureaucracy so that permits are given quickly for new enterprises to start and bankrupt ones to close, food grains are released promptly when prices begin to rise, justice is dispensed with quickly when somebody is wronged, and visas are given (or not given) as promptly as possible.

'India is too big a country to provide for all'

A part of the problem arises because of flaws in the way we see the role of the state.

The state has to be an enabler of enterprise, not a substitute for it.

India is far too big and complex for the government to be able to directly provide food to all, education to all and employment for all.

The government should instead create an enabling atmosphere which allows ordinary individuals to provide these vital goods and services to one another.

This, in turn, means that the government's default option should be to permit rather than prevent.

If we manage to effect a restructuring along these lines, with so much talent in the government, this will give another boost to India's growth.

As I begin in my new job and try to do my share, I will of course miss my Cornell life.

I moved to the US in 1994 with apprehension.

Once I discovered the American university, I could not but appreciate its openness, its fierce regard for individual freedom and voice and its multi-culturalism.

On the latter, though, India, with its pluralism, also does very well.

The babble of varied accents and styles that I encounter even within the hallways of the North Block is very reassuring.

Postscript: It is time for me to bid adieu to my column.

Let me close with a facetious story that sums up the joys and vexations of multicultural life.

'Streamlining the bureaucracy will help boost the economy'

A newly-arrived Indian couple, driving though La Jolla, get into an argument about how to pronounce the name of the town.

When they stop at a restaurant for lunch, the wife asks the waiter: "My husband and I realise that neither of us knows how to pronounce the name of this place. How does one pronounce it?"

The waiter, a new immigrant from China, says: "Don't worry. In my one year here I have heard many people mispronounce it. But it is easy. First you say buh, then guh, and then you say kingggg."

Kaushik Basu is on leave from Cornell University, where he was until recently professor of economics.

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