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Arvind Subramanian
Arvind Subramanian is Professor of Economics at Ashoka University. Prior to joining Ashoka University, Subramanian was a Visiting Lecturer at Harvard’s Kennedy School of Government and non-resident Senior Fellow, Peterson Institute for International Economics (PIIE). He is the former Chief Economic Adviser to the Government of India. Previously, he was the Dennis Weatherstone Senior Fellow at the PIIE, Senior Fellow at the Center for Global Development and Senior Research Professor at Johns Hopkins University. He had served at the International Monetary Fund (IMF) since 1992, most recently as Assistant Director in the research department (2004–07). He worked at the GATT (1988–92) during the Uruguay Round of trade negotiations and taught at Harvard University’s Kennedy School of Government (1999–2000). During his career at the Fund, he worked on trade, development, Africa, India, and the Middle East.
Subramanian has written on growth, trade, development, institutions, aid, oil, India, Africa, the World Trade Organization (WTO), and intellectual property. He has published widely in academic and other journals. He is the author of Eclipse: Living in the Shadow of China’s Economic Dominance and other books on climate change, India, and trade. He obtained his undergraduate degree from St. Stephens College, Delhi; M.B.A. from Indian Institute of Management, Ahmedabad, India; and M.Phil. and D.Phil. from the University of Oxford.
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Climate change and Indian agriculture
Indian agriculture remains vulnerable to the vagaries of weather, and the looming threat of climate change may expose this vulnerability further. This article presents findings from a study that uses new data to analyse the impact of weather shocks on agricultural productivity in the short run, and that of climate change in the long run. It shows that climate change could reduce farm incomes by 15-18%, and by 20-25% in unirrigated areas.
Everything you know about cross-country convergence is (now) wrong
A quarter-century after the empirical growth literature set out to explain why poor countries are not catching up with rich ones, cross-country regressions have mercifully gone out of fashion. In this post, Dev Patel, Justin Sandefur, and Arvind Subramanian point out that in the interim, the core facts have changed.
India's monetary policy in unusual times, uncharted waters
There is a lot of discussion of the right course of monetary policy for India. In this article, India’s Chief Economic Adviser Arvind Subramanian argues that the country’s real policy interest rates have diverged significantly for consumers and producers, and are unusually high for the latter. There is a clear need for more consideration of the appropriate measure of restrictiveness in these unusual times.
Land Shackled - II
Rising land scarcity and land market distortions are increasingly becoming a binding constraint on development in India. In their previous article, Kapur, Somanathan and Subramanian diagnosed India’s land problem. In this part, they propose policy reforms for addressing the problem and ensuring that land facilitates rather than impedes development.
Land Shackled
Rising land scarcity and land market distortions are increasingly becoming a binding constraint on development in India. In the first of a two-part series, Kapur, Somanathan and Subramanian diagnose India’s land problem. In the next part, they propose policy reforms for addressing the problem and ensuring that land facilitates rather than impedes development.
Is the rupee fairly valued?
Is the rupee fairly valued, and should the RBI allow it to appreciate beyond its current rate? This column analyses new World Bank data and finds that the rupee is persistently undervalued by 30% or more. Given the undervaluation, it is puzzling to note that India runs large, structural current account deficits.
Modi's first Budget for India: Disappointing but retrievable
In this article, Arvind Subramanian contends that while Modi’s first Budget was good on vision, it fell short in terms of fiscal adjustment, budgetary transparency and credibility, and specificity and timelines on important policy actions. In his view, these shortcomings are remediable over time as the government forges the required political deals and improves administrative capacity to implement difficult policy actions.
The Jaitley Budget: Planning for crisis
El Nino can potentially derail the best-laid plans of the new government in India. The article contends that the finance minister would do well to plan his first Budget by attaching a reasonable probability to a food crisis this year. The Budget will need to be as much about creating a basis for successful crisis action later in the year as about launching epochal reforms now.
Reversing premature de-industrialisation in India
In countries across the world, de-industrialisation is taking place earlier in the development process. This column analyses how India fares in this regard. It finds that for most Indian states, the share of manufacturing in GDP peaked in the 90s, at levels far lower than comparable Asian countries, and began declining thereafter. Reversing this process is not going to be easy.
Why taxing property is essential for local government accountability
With rapid decentralisation and urbanisation, wealth is increasingly vested and locked up in land and property in India. In their previous article, Kapur and Subramanian emphasised the importance of direct taxes in ensuring citizen participation in holding the government accountable. In this part, they recommend that the 14th Finance Commission should promote tax decentralisation by incentivising state and local government to increase the property tax net.
Taxation's fatal neglect?
Today, the public discourse on government finances in India is largely focused on spending. This article emphasises the importance of taxes, particularly income tax, in ensuring citizen participation in holding the government accountable. It shows that while economic growth in the past decade was faster than in preceding years, expansion of the direct tax net slowed down.
India's unique crisis - a short term fix
While the current turbulence in the Indian economy bears a resemblance to the situation of other emerging economies, it is unique when compared with historical experiences of economic crises. In their previous article, Kapur and Subramanian discussed the misdiagnosis of India’s crisis, and consequent errors in policy remedies. In this part, they outline short-term actions for reversing the growth slowdown, reducing current account deficit and preventing inflation.
India's unique crisis
While the current turbulence in the Indian economy bears a resemblance to the situation of other emerging economies, it is unique when compared with historical experiences of economic crises. In the first of a two-part article, Kapur and Subramanian discuss the misdiagnoses of India’s crisis, and the consequent errors in policy remedies. In the next part, the authors provide a short-term solution for India’s unique crisis.
The Reserve Bank's mission impossible?
India’s current inflation is unprecedentedly high – not in absolute terms but relative to the rest of the world. This article discusses the role of inflation in the recent currency crisis, and argues that taming inflation may prove difficult because the social consensus in favour of moderate inflation appears to have eroded.
What saved the rupee?
This article analyses the dramatic fall of the rupee between May and August this year, and its recovery thereafter. It asserts that it was primarily external factors and an unconventional intervention by the Reserve Bank of India that influenced the evolution of the rupee during the period.
Underperforming even in good times
The late Professor Raj Krishna´s term ‘Hindu growth rate’ was an aptly pejorative description of India´s economic performance in the post-independence period. But how has India performed in the good times, when the country´s growth turned around? This column compares India´s boom years with East Asia´s.
Why Nations Fail: And why India and China don’t fit the story
Like the pantheon’s other occupants, most recently – Jared Diamond’s Guns, Germs and Steel, and Ian Morris’s Why the West Rules for Now, Acemoglu and Robinson’s work tackles one of the biggest questions facing humanity: why some countries are rich and others poor. The book is daringly ambitious in the simplicity of its answer; and yet its scholarship is serious and it offers a deep and plausible insight about development.
Is economic growth always the best policy?
Is economic growth the best way to reduce poverty, raise life expectancy, and improve people’s health? This column looks at different Indian states over the last 20 years. It argues that governments that pursue economic growth cannot be accused of neglecting their social aims.
India's disputed ruling on pharmaceuticals and patents
On April 1 2013, the Supreme Court of India rejected the attempt by Novartis, the Swiss pharmaceutical company, to patent a new version of the leukemia drug Glivec. The verdict follows previous rulings that granted compulsory licenses to an Indian generic drug manufacturer for a kidney cancer drug (Nexavar) patented by Bayer. This article discusses five important questions raised by these rulings.
Charting a course for the Indian economy
Karthik Muralidharan (Associate Professor of Economics, University of California, San Diego) speaks with Arvind Subramanian (Chief Economic Adviser, Government of India) on a broad set of issues ranging from the uniqueness of the Indian development model, the political economy of reforms, reducing factor misallocation in the economy, enhancing State capacity, financing India´s infrastructure needs, to the implications of the Fourteenth Finance Commission, improving the design of social welfare programmes, and climate change.
India's WTO problem: A proposal
India is threatening to block the WTO Trade Facilitation Agreement unless its agricultural policies are exempted from multilateral scrutiny. This article contends that while India’s objectives on agriculture are valid, its tactics in withholding support for TFA are perhaps less so. India should withdraw its opposition, reformulate its position on agriculture to persuade others of its merits, and revisit the WTO issue in the near future.
An Indian trade paradox
India’s trading partners often complain about the restrictiveness of India’s trade regime. This column argues that they are both right and wrong. While India´s economy is ‘closed’ in terms of trade policy, it is ‘open’ in terms of trade outcomes. Tariff barriers in the services sector are among the highest in the world; but given its size, India trades more than a typical country does.
Coal and the climate change debate
In the run-up to the Paris Climate Summit, there has been a growing call among advanced nations to phase out fossil fuels. In this article, Arvind Subramanian, Chief Economic Adviser, Government of India, argues that shunning coal is not viable for India. Instead, the world should come together to find effective techniques to ‘clean and green’ coal.
Four changes to trade rules to facilitate climate change action
Global climate cooperation has collapsed but the need for action has not disappeared. This column argues that only radical technological progress can reconcile climate-change goals with development. It argues that four changes in WTO trade rules could facilitate climate-change action and technological advances without unduly damaging trade.
US-China relations: Role reversal will slow climate change
This column proposes a new approach to climate change that involves China, and eventually other developing countries, offering inducements to the West to take steps to foster a private-sector led green technology revolution.