Feb 23, 2024
Feb 23, 2024
Among the long list of the organizational and individual recipients of the internationally acclaimed and coveted Nobel Prizes worldwide, a few Indian citizens, Indian foreign citizens or India born foreign citizens have received these awards since its establishment in 1895 initially in Chemistry, Literature, Peace, Physics and Physiology or Medicine, and later also extended to the Economic Science in 1968. Be it an Indian citizen or an Indian born foreign national, this country has always fully endorsed and felicitated the awardee and rejoiced the achievement nationally. Perhaps it is for the first time that such an awardee has generated a considerable controversy nationwide from the day one with social and electronic media sharply divided over it even before the awardee formally receiving the award from the Swedish Nobel society.
The author is referring to the Dr Abhijit Banerjee, a Kolkata born economist, who has been awarded the Nobel Memorial Prize in Economics along with Esther Duflo and Michael Kramer for their work in Development Economics. The exact and more appropriate nomenclature of this prize is “Sveriges Riksbank Prize in Economic Sciences”, which falls in a different category compared to other Nobel Prizes in five disciplines in certain aspects. While the joy was felt across the country, the Bengalis were especially ecstatic and proud with the West Bengal State Chief Minister personally visiting the Nobel laureate's parental home in South Kolkata to greet her mother with the announcement to hold a grand felicitation ceremony on his arrival in the country later this month. Reportedly, subsequently the overjoyed West Bengal leader repeatedly made a faux pas by mentioning the Nobel Prize winner as ‘Abhishek Babu’. Soon the award was linked with Bengali asmita (identity) with social media posts claiming "intellectual superiority of Bengalis".
For instance, one Twitter user tweeted, “Dear Dhoklaeaters, We gave you: 6 Nobels 1 Oscar for Lifetime Achievement, National Anthem, Vande Mataram. We eat fish and motton. Beef and pork. Keep your Dhokla, Khandvi & thepla away from us. GET OUT.” In response, citing business tycoons Mukesh Ambani, Gautam Adani, Pallonji Mistri and Udai Kotak, another irate user responded, “Those who are making fun of Dhokla, they should also know that 4 of 5 richest Indians are Gujaratis.” The third was a little more subtle and ground to earth, “Eat whatever you want, but please don't hate your fellow Indians!” Any sane mind would be disappointed with the logic and rationale in such arguments; after all, what the choice of food of a person has to do with the Nobel Prize but then this is how these days things are politicized, conflicts and ideological wars are fought in the bizarre world of Internet.
Nobel Laureate’s Personal and Professional Life
Ordinarily, all accomplished professionals and achievers in the field of science, literature, arts and sports are widely respected in India and media controversies involving them is rather uncommon unless they themselves provide intentional or unintentional fodder. In that sense, it is relatively a new trend with advent of social and electronic media providing easy and open platform. While the polarization of people in complex and divided Indian society on factors like religion, caste, creed and region is not uncommon, the conduct and bias of the professionals also becomes a cause of controversies. For instance, immediately following the announcement of the Nobel Prize, this noted economist made statement in a press conference in Massachussets that the Indian economy is in a tailspin on shaky ground, and also that during the last five-six years at least there was some growth, now even that assurance is gone. Any man of common prudence would certainly ponder and debate the need, timing and rationale of making such a statement from a foreign land.
Dr Abhijit Vinayak Banerjee is an Indian-born (21 February 1961) American economist, who is currently the Ford Foundation International Professor of Economics at Massachusetts Institute of Technology. He was educated at the Presidency College, Kolkata for the Bachelor’s degree, Jawaharlal Nehru University, Delhi for the Master in Economics and Harvard University, Cambridge, Massachusetts for his Ph.D. He has many accomplishments as research associate and fellow with several organizations and was also named one of the Foreign Policy magazine's top 100 global thinkers in 2011. He founded the Abdul Latif Jameel Poverty Action Lab (J-PAL), along with Esther Duflo and Sendhil Mullainathan in 2003 and is one of the directors of the lab. Banerjee named the lab after Abdul Latif Jameel, a top businessman of Saudi Arabia with diversified business, after receiving several substantive endowments from his company 2005 onwards.
Dr Banerjee was married to Dr Arundhati Tuli, a lecturer of literature at Massachussets Institute of Technology and together they had one son. Later he divorced her and re-married, this time with his co-researcher and professor Esther Duflo in the aforesaid institute; from the second marriage, he has two children. He is said to have been a joint supervisor of Duflo's PhD in economics at the same institute in 1999. Banerjee shares the 2019 Nobel Memorial Prize in Economic Sciences with her wife (Esther Duflo) and Michael Kremer, for their experimental approach to alleviating global poverty; incidentally, Duflo is also a Professor of Poverty Alleviation and Development Economics in the same institute. During his JNU stint, Banerjee was arrested and jailed in Tihar Jail for an anti-establishment protest and 'gherao' of the then Vice Chancellor. However, the charges against all students including Banerjee were later dropped by the university administration.
NYAY versus Inclusive Growth
Congress president Sonia Gandhi and former prime minister Manmohan Singh felicitated and lauded Dr Banerjee for the Nobel Memorial Prize in Economic Sciences acknowledging that his work on poverty alleviation and development of new techniques were truly path-breaking. Singh said that the economist’s pioneering innovations in development economics were applicable and useful to policy making in developing countries such as India. Recalling his contribution, the former Congress president Rahul Gandhi recollected how Banerjee had helped the Congress to conceptualize NYAY that had power to destroy poverty and boost the Indian economy; instead, that the country now has Modinomics, that's destroying the economy and boosting poverty. Similar observations were made by some other Congress leaders while felicitating him for the coveted award.
As is well known now, Dr Banerjee was consulted by the Congress on the NYAY programme included in the party election manifesto in 2019 and he had apparently suggested a minimum income guarantee of Rs 2,500 per month for the poor, keeping in mind the fiscal discipline. At this rate, the scheme would have cost the exchequer about Rs 15 lakh million. The party, however, announced a more ambitious and expansive Rs 6,000 a month with an annual outlay of Rs 36 lakh million. Banerjee felt that going with Rs 2,500 or Rs 3,000 per month per family would have been a good start because he was a bit apprehensive about the fiscal constraints. Interestingly, Banerjee simultaneously raised the fiscal dilemma realizing that India did not have the fiscal leeway to afford the NYAY programme with already projected subsidy outlay of Rs 33.40 lakh million for the fiscal year 2019-20 and with NYAY's additional Rs 36 lakh million, it might become unsustainable at Rs 69.40 lakh million annually.
Banerjee, however, believed that effective and efficient implementation (!) of NYAY could bring credibility which, in turn, would help remove some of the existing subsidies in future. This is apparent from his remarks made in this context, "Once you implement this, the credibility of implementing a very large scheme to a very large population is the first step in withdrawing some subsidies.” He was, however, realist to the extent that he felt that the government would have to generate additional resources to fund NYAY through higher taxes, which meant more income tax, wealth tax and GST. While endorsing economists like Dr Banerjee and former Reserve Bank Governor Raghuram Rajan, the Congress had gone to the parliamentary elections in April-May 2019 with many more promises like waiver of loans, heavy and rather unaffordable outlays for health and education while simultaneously promising reduction in fiscal deficit and taxation.
The Congress party’s most significant commitments for the socio-economic development were their Minimum Income Support Programme or Nyuntam AAy Yojana (NYAY), stated to have been prepared in consultation with economists like Dr Banerjee, Raghuram Rajan and others, loan waiver of farmers and 3-6 percent of GDP investments in the education and health sectors. Of this, the NYAY was essentially a flagship scheme for 20% of the poorest families which were assured direct transfer of an amount of Rs 72,000 per annum in bank accounts. From the recent utterances, NYAY essentially appears to be a brainchild of Dr Banerjee. According to the party's estimates, approximately fifty million families would have benefitted under the scheme with poverty removal from India targeted by 2030. The party had estimated an annual requirement of about Rs 36 lakh million which, according to the experts of the national party, was feasible to accommodate within the constantly growing revenue of the Central Government.
As against the above schemes and prospects, the ruling Bhariya Janta Party had joined the election fray with the core philosophy of "Sabka Saath, Sabka Vikas, Sabka Viswas" for the empowerment and inclusive development of all segments of the Indian society. With this philosophy as central theme, the BJP had aggressively highlighted and defended programmes and schemes already undertaken during the previous five years and achievements thereunder with party's commitment towards ensuring justice for all, sabka vikas (development of all), welfare of poor, responsiveness towards the needs of aspirational middle class, geographical equity, dignified development of minorities, elderly care, enabling Divyangs (Disable person), welfare of labourer class, pension scheme for small shopkeepers, welfare of children and artisans, and empowerment of transgender, and so on so forth.
The ruling BJP has set a target for India to become the World's 3rd largest economy by 2030, in the process US$ 5 trillion economy by 2025 and US$ 10 trillion economy by 2032. The chief driving economic factors for the world's fastest growing economy are low tax and investment driven growth, updation of Goods and Service Tax as per needs, capital investment of Rs 1000 lakh million in infrastructure, Make In India campaign to make India a global manufacturing hub, increase contribution of the mining sector to 2.5% of GDP, special package for MSMEs, Entrepreneurship & Start Ups India, Using Tourism to Cluster Services, transparent economy and International Trade. The party also set a target of bringing down the percentage of families living below the poverty line to a single digit in the next five years with a provision of pucca house for all those living in kuchha houses or without housing by 2022.
The policy of constantly reviewing and keeping low tax rate, improving compliance and broadening the tax base had already paid dividend in terms of higher revenue collection. Goods and Service Tax (GST) had shown distinct sign of overall lowering of tax rates and increased revenue collection, particularly for States as also providing cushion to the Central for spending more on public welfare schemes. Basically the choice before electorate during the last parliamentary election was the empowerment and inclusive growth assured by the BJP verses waiver and doles schemes of the Congress mainly Rs 72,000 per annum (NYAY endorsed by Dr Banerjee) to the 20% poor families and loan waiver for the farmers in all states. Needless to mention, the Indian electorate completely rejected the aforesaid economists driven agenda of doles and waivers and voted overwhelmingly in favour of the inclusive development.
These noted economists are far sure unhappy and constantly critical of the government policies, but instead of distributing money or offering loan waiver without watching outcome and accountability, the Modi government is focusing on the common man by improving their living standards and promoting productivity and income through various incentives and financial assistance. During the last 5-6 years, a large number of schemes targeting the poor and common man have been implemented and people actually acknowledge being beneficiary of these initiatives of government. Some of these pro-poor and pro-common schemes include Jan Dhan scheme, Ujjwala and Jeevan Jyoti schemes, schemes for housing, pension and insurance for the people and agricultural crops, schemes for the health and hygiene and making medicines available a minimum rates, incentives for health and education of girls and women, easy loans for business opportunities, and a host of other schemes. It is rather intriguing why economists like Dr Banerjee and Raghuram Rajan are unable to perceive and appreciate these developments.
It Reminds Kaamdar versus Naamdar Again!
India born American citizen Dr Banerjee made statement in a press conference in Massachussets just after winning the Nobel Prize for Economics that the Indian economy was on a shaky ground and the data currently available did not hold any assurance for the country's economic revival anytime soon. He added that in the last five-six years at least there was some growth but now even that assurance is gone. He recommended (apparently for the revival of economy?) that PMO (Prime Minister’s Office) interference should stop, wages under NREGA be raised and his next advice for the longer run was to “Pray more.” Reportedly, Banerjee was reacting on other renowned economist Raghuram Rajan’s observations as part of the OP Jindal Lectures at Brown University in the United States few days back. In a nutshell, while there is no doubt about professional abilities, skills and achievements of the Nobel Laureate, currently the aforesaid NREGA along with the NYAY scheme of the Congress party with simultaneous control and reduction of the country’s fiscal deficit appears to be the his Mantra of poverty alleviation in India.
A lot has already been written and spoken nationally and internationally about the slowdown of the Indian economy based on GDP data of the first quarter and anticipated growth for the second quarter of 2019. Needless to say, there are some facts but more fiction when people tend to derive their conclusions according to their bias and political leanings. In a sharp contrast to the views of the aforesaid Nobel Laureate and Economic Guru, the IMF (International Monetary Fund) in its latest report released on 15 October 2019 said that despite slowdown, India retains the tag of fastest growing economy in the world alongside China with a projected growth rate of 6.1 percent for the current fiscal year. They also projected India’s economy to pick up and grow by 7 per cent in the 2020 fiscal year. Against this backdrop, the world economy is projected to grow 3 per cent this year and 3.4 per cent next year. Thus in contrast to the dark view painted by Dr Banerjee, the overall picture seems brighter despite current slowdown. It is rather strange and intriguing why he has ignored the GDP growth of India in 2014 (7.4%), 2015 (8.2%), 2016 (7.1%), 2017 (6.8%) and 2018 (6.8%) under the same political dispensation.
NREGA (National Rural Employment Guarantee Act 2005), later rechristened after Mahatma Gandhi, is an Indian labour law and social security scheme aimed to enhance livelihood security in rural areas with at least 100 days of wage employment in a financial year to every household with willing adult members to do unskilled manual work. The scheme was initially marred with controversies and corruption; hence the previous NDA government reviewed it, extended its scope to 150 days for rain hit areas and made it output and accountability oriented. Dr Banerjee has suggested enhancing remuneration rates in NREGA. When he was drafted as consultant by the Congress for NYAY before the last parliamentary elections in April-May 2019, by his own admission Dr Banerjee has now divulged that he had recommended a payment of Rs 2,500 – 3,000 per month to the poor families while simultaneously keeping fiscal deficit in check.
Here any person of common prudence and genuinely concerned about the growth and development of the nation would certainly have doubts and questions about the ingenuity and rationale of the economist’s recommendations. Among quite a few such concerns, the author would like to pose only two concerns for the sake of brevity. First, did he envision the empowerment and inclusive growth of poor people or simply happy with little supplementing of their monthly income for the livelihood needs and consumerism? Secondly, did he ever bother to make an effort to genuinely understand the approach and measures being taken by Modi government and party in power for integrated development and alleviation of the poverty from the nation? As economist, he was rightly apprehensive about fiscal deficit but he did not come out with concrete measures for augmenting resources required for NYAY and NREGA. It’s obvious the hit and run approach doesn’t help a cause; it needs holistic approach, commitment and participation with a sense of belonging, and even will to share credit and blame equally. Perhaps here lies the difference between freelance economists making criticism and recommendations, and committed economists making contributions as part of the overall governance.
Anoop Sathpathy Committee appointed by the Union Labour and Employment Ministry had recommended, in their report submitted in February 2019, a national minimum wage at Rs 375 per day irrespective of sectors, skills, occupations and rural-urban locations for a family comprising of 3.6 consumption units. Currently, various states are paying wages for below this rate and this indeed needs corrective action and to that extent Dr Banerjee’s recommendation about NREGA is worth consideration. But then again, this is not something amiss on the part of federal government as the issue is already receiving attention. Now in the context of doles distribution, the ground reality and practice in most cases is that any amount received for free by people is instantly spent on consumer goods, unfulfilled desires and dreams and in cases even on unsavoury habits like liquor, gambling, and so on in the lower income group / poor households. This means, such doles would have no long lasting effects in improving the quality of life or making the beneficiary self-dependent. On the other hand, multiple schemes and programmes systematically launched with an objective of empowerment and inclusive development is bound to be result oriented in terms of gradually reducing poverty and improving the quality of life. The majority of schemes and programmes launched by the NDA government during the last five-six years are aimed at these objectives.
For instance, the Awas Yojana has a target of providing pucca accommodation to all families without a house or kuchha house by 2022 with a good progress so far. Similarly, an amount of Rs 6000 per annum is released to eligible small farmers seasonally to purchase good quality seeds, manure etc. Swachh Bharat Abhiyan and Ujjwala schemes have brought smiles to millions of deprived households over the last few years. It is indeed very surprising why the economists like Dr Banerjee ignore these and plethora of other ongoing developmental schemes for the poor and common man while lamenting at the state of Indian economy abroad. The schemes envisaged for the village empowerment following the formation of new government after 2019 parliamentary elections such as the housing and sanitation (continued from previous government), piped drinking water supply, road connectivity with hinterlands and digital connectivity are bound to improve the quality of life in villages in next few years.
The Nobel Laureate’s focus appears on putting money into the hands of the Indian public, whether by raising the wages, raising prices for the farmers or even offering doles like NYAY of the Congress and simultaneously letting the rupee slide. With no intention of casting aspersions but more than an economist’s, it simply looks like the leftists’ agenda. His criticism of Modi government and claim of downward slide of economy is not a new phenomenon. In fact, he has regularly criticized this government on a number of occasions, particularly the demonetization and Goods and Services Tax (GST); he called the former as weird and bewildering, while the latter for its methodology of implementation. Here the author is not interested into detailed analysis and merits or demerits of demonetization in curbing black money but one well known outcome was evident that lakhs of millions of idle (black!) money indeed returned to banks for circulation and boosting the economy. Similarly, implementation of GST, despite initial hiccups, has facilitated ease of business, transparency and significant improvement in revenue collection, facilitating and funding several pro-poor welfare schemes.
Remarkable Convergence and Concordance
Currently, three internationally acclaimed and accomplished economists, namely Amartya Sen, Raghuram Rajan and now Abhijit Banerjee are constantly in news in India, and they have possibly close links too. Amartya Sen is an Indian citizen, Nobel Laureate in Economic Sciences and Bharat Ratna but has mostly worked and taught in the United Kingdom and the United States for over last four decades in the chosen field of welfare economics; he also owns houses in Cambridge, Massachussets and Cambridge, England. Raghuram Rajan is a noted Indian economist and financial analyst having served in many coveted assignments including Governor, RBI; he is an Indian national and US Green Card holder mostly serving and living in US. Abhijit Banerjee is India born US citizen, Nobel Laureate and an expert in poverty alleviation, who received Ph. D. and continuously served in US after post-graduation in JNU Delhi. However, the common and notable features of three noted economists is their interest in Indian economy notwithstanding own prolonged absence and core interests abroad and all the three are voracious critic of Indian Prime Minister Modi, his government and policies.
While Raghuram Rajan may have reasons to be unhappy with the government as he himself revealed in September 2017 about his keenness to take an extension for the second term as RBI Governor but the government was not willing thereby leaving no choice for him but to return to the University of Chicago, there seems no such known irritants or compulsions with Amartya Sen and Abhijit Banerjee; in fact, Bharat Ratna was bestowed on Sen in 1999 by the BJP government under Atal Bihari Bajpai. Leave aside, they are professionals in respective fields with a role to guide and advise without being accountable to people while the political heads and parties have greater and many more responsibilities and accountability to steer nation on the path of peace, prosperity and development with a holistic approach. Hence it is important that the professionals stay away from any political bias or leanings and be very objective in their evaluation and recommendations. Noted economists like Dr Banerjee might loose relevance, credibility and popular appeal if they continue to see progress and development in India through coloured lenses. It is beyond any logical and rational imagination why he is unable to see and acknowledge the progress what world's renowned and leading financial institution like IMF is endorsing in wide and clear terms.
Like many other awards and decorations, Nobel Prize too is a measure and recognition of the person in the designated field. It doesn’t measure or touch humane aspects and other personality traits of the awardee; why else professionals like Dr Banerjee should overlook umpteen initiatives and measures taken for the empowerment and inclusive growth of the Indian masses? He should resist his criticizm and opposition of Modi government and their policies in a zeal to justifying and pushing own agenda of doles and wage increase for the sake of poverty alleviation. This is true to Nobel Prize as well as to many others such as Man Booker Prize for lauded literary piece or body of work and Ramon Magsaysay Award for integrity in governance and courageous service to people. Indian author Arundhati Roy is a recipient of Booker prize but, in India, she is famous (or infamous!) more for her political activism and support to the separatists’ movement in Kashmir rather than her own literary pursuit; Delhi Chief Minister Arvind Kejriwal is recipient of Magsaysay Award but has earned name more for defending corrupt party colleagues, anarchist ways and dharna antics instead of his award winning integrity in governance.
Indian people are known for their craze of hero worship and at times express hysterical jubilation and adulation for achievers in various fields. Had this not been case, the hype and controversy referred to in the introductory paragraphs could have been conveniently avoided. It's not very difficult to fathom early leanings and political ideology of Dr Banerjee from his acts of agitation and gherao during student days in JNU as also grit and resolve for securing rightful claim on "Bhindi" during brief jail term. It is also pretty clear that after joining Harvard, he never looked back be it his personal life or professional career, so much so that he did not allow national interests or sentiments to come in way while opting for the US citizenship. From his comments upon the Indian economy in foreign land, one could see how bold and ruthless he could be in pushing his agenda and ideology. And here in India, people are celebrating and fighting for him as an icon of Indian pride and Bengali identity. His personal and professional life is open like a mirror and the author leaves it to the Indian folks to look and decide for self whether this Nobel Laureate is indeed a noble persona too.
More by : Dr. Jaipal Singh