Former prime minister P V Narasimha Rao did the honours as chief guest and more importantly, made news by publicly claiming for the first time ownership of the economic reforms process initiated in 1991.

There was every reason for the hyped setting. It was Dr Arjun Sengupta, an institution by himself in economic policy, who was launching his new book Reforms, Equity and the IMF: An Economist's World. The author's impeccable credentials ensured that when he held forth on his favourite theme that evening, others just listened, even if they were not always in agreement.

The leading economist, who is currently with the Centre for Policy Research and Jawaharlal Nehru University, has served as economic adviser to the government and special secretary to a prime minister apart from having done a stint with the Planning Commission. He has also been associated with the IMF's South Asian policy first as executive director for India, Bangladesh and Bhutan, and then as special adviser to the IMF managing director.

Having been India's principal policy makers who was also involved with the reforms exercises of Vietnam, Zambia, Peru, Argentina and Guyana, it is not surprising then that the author's book looks at the reforms process, their designs and the political economy of their implementation from the perspectives of the Indian experience through different articles he published in different journals over the last few years.

Ask Dr Sengupta why is he perceived to be ambivalent on the reforms process despite once having taken even a stance right of Manmohan Singh and he reasons out against the allegation quite forcefully. "I have always been a pro-reformist but the reforms must be clearly designed, especially in the Indian context. These should pertain not just to governance but must also be seen to deliver," he points out. In other words, policy-formulation is meaningless unless it is also perceived as making an honest attempt at achieving the national objectives, he adds.

According to him, one major count on which the Indian reforms process has missed out is by way of inadequate public investment in infrastructure and social development. "Howsoever one wishes, private investment in the two areas cannot be fulfilled by private participation, simply because at stake are issues like long gestation and proper pricing. Even though Mr Rao argued on the occasion that the government need only be concerned about health and education while FDI should take care of the infrastructure needs, the expert points out that it is not feasible because it is not cost-effective.

Dr Sengupta then argues how the entire process has been wrongly structured in India. "For the reforms to be really effective, we need to mobilise additional resources to raise public investment. And how do we do that except, of course, through taxes. The trend, on the contrary, here has been to reduce taxes. Our tax-to-GDP ratio during the 90s has been much lower than what prevailed during Mrs Indira Gandhi's time," he says. Added to that is the inability to curb expenditure on the government's part and the consequent burgeoning fiscal deficit. So there are at least two major counts on which our reform process has faltered, emphasises Dr Sengupta.

Equity leading to redistribution in favour of the underprivileged should be the principal goal of development policies, he argues, unlike merely accelerating the pace of economic growth that we have adopted until now.

Referring to the relationship between professional economists and politicians in the business of policy-making, he points out that it is not just about finding out how the variables are linked but about placing them in the right political context. Even though the economic policy expert is not a politician, he needs to know what the politician really wants and be able to relate the economic interactions to the national objectives.

On the score of pro-poor thrust, as on so many others, Dr Sengupta gives full marks to Mrs Gandhi, who in his view, was the first one to initiate liberalisation in right earnest. "In '81, she initiated the liberalisation process in tandem with her earlier pro-poor image," he says. That's when most of the investment and import controls had begun to be abolished. Rajiv Gandhi continued the exercise in a much more transparent manner as a result of which the GDP growth rate was much higher at 5-5.5 per cent during the 80s than the erstwhile 3 per cent, he adds. The result was that by the time Mr Rao took over, opposition to liberalisation had considerably reduced. The legacy however was not optimally utilised because despite the reforms being under way in full swing, fiscal control had begun to slip. "We had a surplus in the revenue account well until 1983 and it was for the first time in 84-85 that we borrowed to plug in the deficit, Dr Sengupta says.

While pointing out the malaise, the expert also prescribes a remedy: ``Reforms must go beyond markets to include reforming the government, making it more effective at all levels, in which the people can participate and the reforms are owned by them."