Last Thoughts

Among the many things that Chelliah did,it is easy to forget the relatively minor items,like the task entrusted to him by Dr Manmohan Singh when he was finance minister. Instead of using UNDP resources to send bureaucrats on training junkets abroad,it was decided that some of this money was better utilised in undertaking research. As fiscal adviser,Chelliah had oversight of this research project,which lasted from 1993 to 1998 and,therefore,extended beyond his tenure as fiscal adviser. In terms of productive use of resources,this was one of the most successful and it is curious that this Chelliah contribution rarely gets mentioned,including in this volume. One can speculate that Chelliah’s explicit,as opposed to implicit,interest in poverty eradication came about through his involvement in this UNDP/Finance Ministry project.

Without downgrading Chelliah’s seminal work and his impact on policy and reform,one is disenchanted with this volume. Why was it necessary? There are several other volumes one would have remembered Chelliah by. In a way,this book dilutes that memory. Of the three essays,the value addition is in the first one,which,co-authored with R. Shanmugam,was originally published in The Economic and Political Weekly in 2007. This expands the argument and one understands that Chelliah desired this expanded version to be published. The context is the oft-repeated one of lagging states not performing well by any indicator,despite liberalisation and reforms.

One can pin this down to misgovernance,or other factors. Chelliah pinpoints four modernisations to improve governance and overcome myopic populism in under-performing states — universal education,development of a scientific outlook,political transformation and ethical transformation. More tangible,to incentivise reforms in laggard states,is the idea of routing Centre’s assistance through a special purpose vehicle (SPV). The growth takeoff occurred in India in 2003-04 and what is interesting since that year is a catching-up by historically laggard states,Bihar included,on which there is a case study in the volume. The GSDP (gross state domestic product) data used in the essay end with 2004-05 and one wonders whether Chelliah would have written it differently had more recent data been available. Having said this,the core question of efficient use of central government assistance still remains an issue.

Raja Chelliah used to say that he wanted to write a textbook on the Indian economy,a bit like an Indianised Samuelson. He never got around to doing that. But I prefer to remember him because of his earlier work,not this book.