When Sunil Khilnani wrote the “Idea of India” in 1997, it was not just about the country marking 50 years of independence from British colonial rule. It was a powerful salvo fired in what was by then a clear and decisive war for the soul of India.
Many similar salvos have been fired. Most of them have come from “eminent historians” who have either denigrated or denied Indian (read Hindu) history. The bitter war is still being waged in the political, social and global arena.
This has become a take-no-prisoners ideological war. When wars become ideological, the first casualty are facts and data. So, the authors have been watching amused as “eminent economists” have now joined battle.
But just as “eminent historians” have mauled facts for decades, “eminent economists” have started mauling data. Since space is limited, the authors will highlight just two eminent economists: Kaushik Basu and Raghuram Rajan. Rhetoric 7 polemics come free, so just carefully read what the two have been saying in public.
Most analysts and rating agencies were of the opinion that India will grow at about 6.5% in the second quarter of 2022-23. The doomsday chorus singers that include “eminent economists” were lamenting the end of the Indian promise.
Recently released data shows the GDP growth rate was actually 7.6%. Kaushik Basu, former chief economic advisor of India in the UPA regime and professor of economics at Cornell University, who sometimes relies on New York taxi drivers to analyse the Indian economy posted on X: “7.6% growth is not bad, but it’s a sad commentary on changing standards when a nation like India, which once routinely grew around 8%, now celebrates that growth is at 7.6%, especially when this happens with youth unemployment at a near all-time high.”
What does data say? The co-author has a master’s degree in economics and is still a student. He doesn’t find any historical evidence to support the claim that India “once routinely grew around 8%”. He has perhaps chosen to ignore the pejorative “Hindu rate of growth”.
Or perhaps the term Hindu is a problem for him. Almost simultaneously, Raghuram Rajan, who succeeded Basu as chief economic advisor before going on to become Governor of the Reserve Bank of India, jumped in and added his own take of dissing India and its future economic prospects.
He loftily pronounced: “India’s growth potential is today about 6% a year, GDP growth. If you do the math, at 6% a year, you double every 12 years and therefore in 24 years, we’ll be four times our per capita income. Today, the per capita income in India, as you know, is just a little below $2,500 per person. Multiply by four, we get $10,000 per person… So if you do the math, at our current rate of growth, you know, strong as it is highest in the G20, we don’t get rich but we stay lower middle income till 2047.”
Again, what does data say? For one, without getting into technical jargon and details, Rajan has chosen to ignore the power of “compound interest” in making calculations. More importantly, he has chosen to ignore what global institutions like the World Bank and IMF accept as routine: GDP and per capita income measured in purchasing power parity terms.
In case you are not familiar, PPP means how much your monthly income is when you purchase goods and services in your own country. For an Indian, it doesn’t matter how much rice or dal or even a burger costs in New York or London or Tokyo. She is concerned with what she pays in India.
Given that, the “actual” per capita income of India is not “about $2,500” but $8,000. So if we agree with eminent Rajan, India will have a per capita income of $32,000 by 2047. Anyone who believes in democracy and free speech will support the rights of “eminent economists” like Kaushik Basu and Raghuram Rajan to express their views. But there is a problem.
Any economist worth her salt would respect data. The two don’t seem to. The reason goes back to the war for the soul of India. Before 2014, “eminent historians” led the war to “save” the idea of India. They insisted that the likes of Babur and Aurangzeb never destroyed any temples and were paragons of “secularism”.
The imminent inauguration of the Ram Temple in Ayodhya and court verdicts related to Kashi Viswanath and Krishna Janmabhoomi suggest “eminent historians” are losing the narrative battle over the Idea of India.
Enter “eminent economists” to open another front in this civilisational warfare. On 14 December 2022, Raghuram Rajan joined the Bharat Jodo Yatra spearheaded by Rahul Gandhi. In a lengthy statement on social media later, Rajan justified his walk with Rahul Gandhi as gesture of a “concerned citizen” to take a stand against hate and in favour of love.
He sort of ended his support for the Idea of India by saying: “That is why I took part in the Bharat Jodo Yatra, not as a former public servant or as an economist but as a concerned citizen. I walked a few miles to add my support to those committed citizens, who, in time-honoured Indian fashion, are walking the length of India to strengthen national unity and communal harmony.”
No one should have any problems with his opinions. But he became “eminent” by having a discussion with Rahul about the Indian economy. In that, he told Rahul Gandhi that India would be “lucky” if GDP grew by more than 5%. India grew that year at 7.2% and will grow this year at 7%.
Sure, economists do go wrong in their forecasts. But only the “eminent” ones are so wildly off the mark. On top of that, Rajan is still insisting the PLI scheme to encourage domestic manufacturing is a sham.
Data says mobile phone exports have grown from Rs 45,000 crore to an estimated Rs 135,000 crore in just two years. But since he is eminent, Rajan continues to insist India must abandon its manufacturing ambitions.
His predecessor as chief economic advisor, Kaushik Basu is even more eminent. Sometime back, he posted on X: “India’s growth 7.2% in 2022-23 looks good but disappoints when you realize growth in 20-21 was -5.8% (one of world’s lowest), causing the baseline from where India’s growth is computed to drop. India’s annual growth over 2020-23 is 3.28%—too low for a nation with so much talent.”
He doesn’t mention Covid. And this from an economist under whose watch retail inflation was in double digits in the UPA era. Why do these eminent economists say and do such things? To repeat, it is not just economists and historians. A broad range of intellectuals, academics, jurists and writers do the same.
The authors think they all have every right to their political and ideological leanings. They also have every right to criticise the current government. But there is an important moral reckoning that is ignored by the eminent: Please respect data and facts. They would get respect if they respected data. As simple as that
Yashwant Deshmukh is Founder & Editor in Chief of CVoter Foundation and Sutanu Guru is Executive Director