Arvind Subramanian: The development economist with strong pro-growth stance

Written by FE Online | New Delhi | Updated: Oct 17 2014, 21:48pm hrs
Arvind-Subramanian-CEAArvind Subramanian, the new Chief Economic Adviser, speaks to the media after taking charge at North Block in New Delhi. (PTI)
In an indication of the Narendra Modi government's plan to quickly embark on the relatively difficult structural changes in the economy it has been fighting shy of, the finance ministry saw two key changes on Thursday at the top level, while a larger reshuffle also saw change at the helm of bureaucracy in the crucial coal ministry.

While finance secretary Arvind Mayaram was replaced as the top official at the economic affairs department by his 1978 batchmate of the Indian Administrative Service Rajiv Mehrishi, who currently is the chief secretary of Rajasthan and a former fertiliser secretary, US-based economist of Indian origin Arvind Subramanian was named the chief economic adviser, a post that was lying vacant since Raghuram Rajan vacated it to become Reserve Bank of India governor on October 1 last year.

A high-powered academic who tells his students to read Joseph Conrad and Gabriel Garcia Marquez to better understand economic development was confirmed as chief economic adviser to Indian Prime Minister Narendra Modi's government.

His appointment also inserts a friend of Reserve Bank of India Governor Raghuram Rajan at the heart of policy making, as Modi seeks to make good on a jobs-and-growth pledge that swept him to power in a general election in May.

Arvind Subramanian's new job gives him considerable influence over the next budget, due in February, as expectations grow for significant reforms to free up the Indian economy.

Subramanian, who took charge on Thursday, told reporters that he was hopeful of on the Indian economy and that macroeconomic stability and creating the conditions for investment would be his priorities. Known for his strongly pro-growth stance, the development economist, who is currently senior fellow at the Peterson Institute for International Economics in Washington, had worked closely with Rajan when both were at the International Monetary Fund (IMF).

Associates describe Subramanian, who held senior fellowships at the Peterson Institute for International Economics and the Center for Global Development, as a forthright intellectual.

"The most important thing to know about Arvind, aside from his first-rate credentials as an economist, is that he is a truth-teller," said Milan Vaishnav, an India expert at the Carnegie Endowment for International Peace in Washington.

Subramanian has written on a number of issues including the emerging giants India and China, global trade and development, multilateral institutions, aid, oil markets, Africa, and the World Trade Organisation. I want to say that I am absolutely honoured to be appointed to this post. This is a time of great dynamism in the Indian economy, and we have a government that has the mandate to bring about change, he told reporters.

(With inputs from agencies)