Free market economist Arvind Panagariya is likely to steer the new economic policy body away from Nehruvian socialism.

Committed free market advocate and Professor of Economics at Columbia University Arvind Panagariya has been appointed to run Prime Minister Narendra Modi's new economic policy body. As NITI Aayog’s vice chairman, Panagariya who has authored several seminal books on the Indian economy, will have a key role in coordinating the country’s economic strategy.

Free Market Stamp

By settling on the right-leaning star economist to run his new policy commission, Modi has hammered a final nail into the coffin of socialist planning that defined India’s economic blueprint. Most economic pundits believe that with the appointment of Panagariya we are likely to see a bit-by-bit breakaway from Nehruvian socialism.

Panagariya's market-friendly, pro-growth economics will help shape Modi's outlook. The Princeton educated professor is likely to push for reforming land and labor markets to reinvigorate investment in India and strengthen the manufacturing sector.

Currently, India’s growth is capital-intensive, fueled largely by the growth in services like IT and high-end manufacturing. India’s lopsided growth does not hold out enough promise of jobs for unskilled people at a time when nearly 10 million Indians enter the labor force every year. To soak up India’s surplus labour force, it would be desirable to see labour intensive, relatively low, value-added manufacturing. To this end, Panagariya is wisely focused on wanting to strengthen the small and medium enterprise (SME) segment — the backbone of Indian manufacturing.

Panagariya has told reporters the administration’s priorities should be ending fuel subsidies, improving the health of state-run banks and eliminating uncertainty and bureaucratic discretion regarding taxation of companies. Analysts expect Panagariya to rapidly push for an open, private sector-led, more liberal order.

Cosmopolitan Indian with Strong Indian Roots

Panagariya is the very model of a cosmopolitan Indian and has the intellectual pedigree (educated in Princeton University in the United States and Rajasthan University in India) for an itinerant world. Panagariya got his Ph.D. degree in Economics from Princeton in the 1970s when there weren’t too many Indian students in America.

“There were only two people in my Rajasthan University faculty who had been to the United States. Everyone seemed skeptical. One of them told me Princeton had a big name but its Economics faculty wasn’t so great. It would have been the biggest mistake of my life if I had listened to him,” Panagariya earlier told Braingain Magazine.

“We grew up in an India where there was no Internet, comprehensive foreign university literature or rankings, so who did you trust? Things have certainly changed. The whole experience makes me believe that you go where your destiny takes you. What happened to me went beyond my wildest imagination.”

In the past, Panagariya has been the chief economist of the Asian Development Bank and worked with the World Bank, but academe has always been his true calling. He is a Professor of Economics and the Jagdish Bhagwati Professor of Indian Political Economy in the School of International and Public Affairs (SIPA), at Columbia University.

Panagariya has authored over fifteen books including “India: The Emerging Giant.” His book, Why Growth Matters, with Professor Jagdish Bhagwati has been described by The Economist magazine as “a manifesto for policymakers and analysts.”

The President of India recently honored Panagariya with one of India’s highest civilian awards, the Padma Bhushan.

You can read the two-part interview Professor Panagariya gave Braingain Magazine at  “Most Well-ranked US Schools Accept Students only for a Ph.D.” and Mathematics to study Economics.
 

Uttara Choudhury is Editor, North America for TV 18’s Firstpost news site and a writer for Forbes India. In 1997, she went on the British Chevening Scholarship to study Journalism at the University of Westminster, in London.

Tags: Arvind Panagariya, Columbia University, SIPA, Nehruvian socialism, NITI Aayog, Narendra Modi, Economics, Princeton University