By Abhishek Sudke
Dr. Ramgopal Agarwala is a NITI Aayog distinguished fellow who serves as the Chairman of the Pahle India Foundation. He is an Honorary Senior Fellow at the National Council of Applied Economic Research (NCAER), New Delhi. He worked at the World Bank for 25 years in various senior positions with his last posting in Beijing, as chief economist of the World Bank. He did his Ph.D. in econometrics from Manchester University and has created macro-models for India, UK, Canada, and various developing countries.
While the future of India, both in terms of economic well being and global standing, emanates uncertainty and doubt, Dr. Agarwala has presented a hopeful picture of success on both ends through the convergence of fields and mobilization of national resources in the most efficient manner possible. In his exchange with VIT Today, he explained the link between India’s economic future and its foreign affairs standing in South East Asia while elaborating on means of winning in both places. We had the glorious opportunity where we could peruse his notes on economic modeling and Indo-China relations. While also referring to his book- Resurgent India: Ideas and Priorities, we had the opportunity to get his insights on important issues such as growth, employment, Aatmanirbhar initiative, and housing.
Speaking on the economic policy of the nation, Dr. Agarwala believes that a massive effort needs to be made for improving India’s social and physical infrastructure. He also stated that public expenditure on health should be increased from the current 1% of GDP to 4%; on education and research & development from 4% to 8% of the GDP. Investment in housing should also be increased from about 4% of GDP to 8% by 2025 and making India slum-mukt. He mentioned that there needs to be a massive expenditure for an increase in the infrastructure of railways and waterways. Moving ahead, renewable energy should become the main source of our energy especially by 2047. In short, we need a Green New Deal which seriously considers carbon tax.
Shedding light on the bureaucratic structures, he believes that monetary and fiscal policies should not remain in silos but should be integrated under the economic committee under the aegis of the cabinet perhaps with advice from NITI Aayog. He believes that Fiscal Responsibility and Budget Management Act, 2003 (FRBM Act), and that the RBI Monetary Policy Committee should be abolished. He explains that moving ahead growth and employment generation should be India’s primary objective rather than inflation targetting and investment, as this would pave the way for GDP ratio to be increased to at least 40%. Looking at China’s International Development Research Centre, he believes that it should be considered as a model for the operation of NITI Aayog. Dr. Agarwala explains that development finance companies need to be revived and become a major instrument for funding social and physical infrastructure. Providing more funds and room to the private sector should be done but only under accountability measures that ensure the maintenance of transparency and honesty.
Elaborating further on his book, Resurgent India, he states that the book deals with not only short-term but also medium-term issues and these remain valid in the current context. He mentions that NITI Aayog and GOI need to take them more seriously than it has been doing. He believes that the Indian government is still living under the grip of the vicious Washington Consensus in many areas and is relying too much on populist slogans. Talking about the youth, he elaborates on how the business-as-usual scenario, would lead to dire results on growth and employment generation, particularly for the youth. He emphasizes on how we need to forgo the discussion on "sweet spots", the fastest-growing major economy, the demographic dividend, etc. Further, we should recognize the tough situation we are in and work towards a new paradigm for a new India which departs from the 1991 spirit. He explains that young graduates have to do that with all the assistance that the older generation can provide and that we need a new vision, a new grand strategy.
Providing his insight on the situation with China, he speaks about how China works on a long-term strategy and that India also must have a long-term strategy to counter China’s intentions. The Prime Minister’s call to make the 21st century India’s century assumes special significance in that context. He states that leaving the diplomatic sweet talk aside, China wishes to become a hegemonic power for Asia just like the United States in the Americas. He explains that India can prevent that only by becoming economically and militarily strong and that preventing it is extremely important for our global and regional standing. He believes that Indians need to showcase a bit more of the Spartan spirit of discipline and a little less of the Athenian spirit of argumentation. Speaking of mobilizing national effort, he gave examples of Japan, South Korea, Taiwan, Singapore, and China who mobilized massive national effort for development by internalizing an “existential threat” and the threat of Chinese hegemony needs to drive us in the same fashion.
Addressing the engineering graduates he said, ”Atmanirbhar Bharat Abhiyan provides an excellent blueprint for their action. Technologists can look at the list of commodities and services for which we are dependent on imports and apply their technical knowledge to make them in India. They would be given funds, mentoring, land, and other infrastructure. They have to make a pledge that they would use the funds honestly and ensure world-class productivity so that they can compete in the world markets within a given time frame which would differ from commodity to commodity. For those with agricultural backgrounds, making agriculture technology-oriented and export competitive is an exciting challenge. India needs import-saving in edible oil and export promotion in fruits, vegetables, etc. For exports, fruits and vegetables have to be toxicity-free and suitably productive. The technology graduates can take that as a challenge. They may look to Vietnam and learn how to increase productivity massively in agriculture.
They can rest assured that if they succeed in becoming agri-entrepreneurs with world connectivity, they will have fulfillment in life even more than their counterparts in Bengaluru working for a salary. We are facing a new battle for keeping our azadi and our Graduate batch should consider themselves as soldiers in a new form of freedom struggle similar to what Gandhi led us for decades with success at the end.”
This was our enriching exchange with Dr. Ramgopal Agarwala. His motivated spirit and the sea of knowledge showcases the pathway for young people to follow. Our team at VIT Today are greatly obliged to have received this opportunity to have this exchange with him.
Editors note: Dr. Ramgopal Agarwala provides his views as a former professor and does not represent NITI Aayog’s views in any manner whatsoever.
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