Indianizing Indian Thought

This session of the webinar series will feature Prof. K V Subramanian. He is Professor of Finance at Indian School of Business. He was the Chief Economic Advisor to Government of India (2018-21).

Abstract

The separation of religion and state—a foundational feature of the protestant ethic—has been central to the western conception of liberalism. The institutions that emerged from these liberal ideals—of which capitalism and democracy are key elements—have been crucial in delivering prosperity to the western world. This empirical fact creates two temptations. First, is to believe that the western model of liberalism viewed as the separation of state and religion represents the only path for a liberal society to evolve. And second, that the modern ideas of capitalism and liberalism are alien or even antithetical to the Orient.

Are these beliefs correct? Should ancient civilizations—like the one India represents—move away from their DNA to mimic the Western model? This question is posed by taking a longer horizon of history—one that includes India as an enormously prosperous and virtuous society. As The Economic Survey of 2019-20 clearly highlighted, for three-quarters of known economic history, i.e. from 1 A.D. to 1750 A.D., India accounted for at least 1/3rd of the World’s GDP. To understand the extent of economic dominance that India had during this period, recognize that the U.S.—the dominant economic power today—has accounted for about 30% of world’s GDP over the last half-a-century. Half-a-century versus seventeen and a half centuries! Dominance that lasted 35 times longer!

As part of a larger research agenda on socio-economic questions that are critical for India@100 and beyond, the talk will present a preliminary examination of some of these issues to initiate a debate on some key questions: What is India’s DNA? Was it consistent with liberal ideals, even if not necessarily defined as in the Western formulation? What were the elements of this DNA that delivered the unparalleled prosperity? Are these elements conceptually consistent with the ideas that modern economics has developed?

Speaker's Bio

Dr. K V Subramanian, formerly Chief Economic Advisor to Government of India, is a Professor at the Indian School of Business. A PhD from Chicago Booth and a top-ranking IIT- IIM alumnus, he authored the path-breaking Economic Survey that commends "Ethical Wealth Creation” for a prosperous India. By integrating India's rich economic and spiritual heritage with modern economic ideas, he advocates ethical wealth creation through a marriage of the invisible hand of the market with the hand of trust.

The 2019 Economic Survey – again authored by Dr Subramanian – laid out the Strategic Blueprint for India to become a $5 trillion economy by generating a “virtuous cycle” where private investment, growth, and consumption feed into each other. In the 2021 Economic Survey, he advocated counter-cyclical fiscal policy using public capital expenditure to trigger the “virtuous cycle” following the Covid crisis. Drawing on the ideas advocated in his three Economic Surveys, India’s economic policy toward a self-reliant India is now characterised by: (i) sharp focus on economic growth to complement efficient welfare by generating the resources to fund the welfare programs; (ii) growth via private sector occupying the commanding heights of the economy; and (iii) “virtuous cycle” of growth via public investment in infrastructure and structural reforms to enhance both aggregate supply and aggregate demand. The slew of reforms implemented by the Government draw on the ideas advocated by Dr. Subramanian.

Subramanian has brought several ideas to implement welfare programs effectively. His push for the behavioural economics of ‘Nudge’ is acknowledged for its potential to bring behavioural change in India. His idea of Thalinomics – what a common person pays for a vegetarian or non-vegetarian thali – has been acclaimed as the Indian Big Mac Index. Combined with the idea of The Bare Necessities index to measure the reach of water, sanitation, a healthy environment to the common citizen, these ideas enable robust measurement of the reach of welfare programs across India’s large population.

Dr Subramanian has been conferred the Distinguished Alumnus award by his alma maters IIT-Kanpur and IIM-Calcutta. Apart from being the youngest CEA, Subramanian is among the youngest to receive this honour from his alma maters. His research in banking, law and finance, innovation and economic growth, and corporate governance has been published in the world's leading journals.

Format

Prof. K V Subramanian will be speaking for the first 45 minutes. We will then be holding a Q&A Session.

This session is part of the larger project:

Season II Dissecting Capitalism: Its past, present and future

This series aims to explore the tenets of capitalism over the fabric of time and examine its influence on the global economy and social classes.

More information on Season I