An expert in the science of economics, renowned and strikingly way-out, Lord Meghnad Desai, is better known for challenging notions and pursuing controversies on not only economics but also topics like history, old Bollywood movies and anything that catches his attention. India today is on a promising path of development and transformation, with the new government initiating radical economic reforms. In a candid interview with Corporate Citizen, the instrumental economist and Professor Emeritus at the London School of Economics (LSE), talks about fast-tracking Indian economy, needed economic reforms, human development, and the role of private markets
An esteemed academician with 38 years of teaching experience, Indian-born British economist, Meghnad Jagdishchandra Desai is a life peer at the British House of Lords. He serves as the founder chairman of Meghnad Desai Academy of Economics, based in Mumbai. He has stood for the speaker in the British House of Lords in 2011, being the first ever non-UK born candidate to do so. Desai has been awarded the Padma Bhushan in 2008. Desai secured a bachelor's degree from Ramnarain Ruia College and then pursued a master's degree from the University of Mumbai, after which he won a scholarship to University of Pennsylvania in August 1960. He completed his PhD at Pennsylvania in 1963.
Desai started his career working as an associate specialist in the Department of Agricultural Economics, University of California, Berkeley. Subsequently, he was a lecturer at the London School of Economics (LSE) in 1965. At the LSE, he taught econometrics, macroeconomics, Marxian economics and development economics. Desai was a founding member of the Development Studies Institute (DESTIN) at the LSE in 1990. He also founded the centre for the Study of global governance at LSE in 1992.
A prolific writer, Desai has written several books and extensively published articles in academic journals and newspapers in India and UK. He wrote his first book Marxian Economic Theory in 1973 followed by Applied Econometrics in 1976 and Marxian Economics, a revised edition of his 1973 book in 1979. He wrote Testing Monetarism, a critique of monetarism, in 1981. In 2002, Desai's book, `Marx's Revenge: The Resurgence of Capitalism and the Death of Statist Socialism’ stated that globalisation would tend toward the revival of socialism. He has also authoreded a biography of Indian film star Dilip Kumar titled `Nehru's Hero: Dilip Kumar in the life of India’, wherein he discovered parallels between the socio-political arena in India and its reflection on screen. Desai retired from the LSE in 2003.
“There are lots of great economists in India; there's no problem with that. Is India a lousy economy? It was a very sluggishly growing economy. But economists don't make (the) economy-economies make themselves. The problem is how you give incentives to people to work harder, how to innovate, how to migrate to get jobs. What people do with themselves is what the economy is” —Lord Meghnad Desai
Because regulatory mechanism is not very good, non-regulation is not a problem. It will ultimately be competition. You make the opening of private sector easier-because it is not there. But still people’s motives will be there. Take for example the education sector, if I have more information about the variety of colleges in India-I as a consumer can choose where to go. Information about what exists, what consumer wants is very important-so let’s not regulate, let’s increase information. Now for example in the UK, all universities are online-so people can judge which university they want admission in. So, information plus competition is the ideal formula.
I see many magazines are publishing rankings for business colleges; they don’t make much sense except for embellishment. Again in terms of information provided here, in order that people will discern which better information path is provided. Today’s young people they are technology savvy and they are demanding transparency
Across the Indian political spectrum, nobody likes foreign involvement. I think they are afraid of competition. The HRD Ministry should set a goal of bringing five Indian universities in the top 200 in the world, within 10 years. It is shameful that India does not have a single university in the top 200 in the world, whereas China has seven of them. At last in the banking sector we are about to create a mark.
We are going through a long depression from 2008 onwards and people have become defensive about trends. Brexit is the manifestation of defensive attitudes. I think once the economy starts reviving we will grow, but the next three to five years, we need to be watchful.
Not much. Basically because Brexit will make UK more amenable to FTA, it should help India. Because India has very high prestige in UK-as an investor, India is a large investor.
I see it as a very positive sign. I think with GST, the government can bring in whole set of reforms. I am very confident that the government will work for accelerative growth. They can really pursue the ease-of-doing-business and cut out the middlemen. Lot of corruption happens because of too many gatekeepers. What you really need in India is to remove distrust as a default option. Therefore, you require so many documented proofs. The colonial system regarded the Indian rigid structure and after 70 years of freedom we have not lost the distress that the state has created. And it is economically costly. I strongly believe that attitude is the problem.
If we could separate out items of daily purchase-that’s were inflation is. Items of daily purchase such as onions and tomatoes, are subjected to various fluctuations and because we can’t have substitutes, inflation becomes a political controversy. We really need a separate way of treating these matters.
If foreign blocks disclose country’s black money, I think Indian politics will collapse.
Higher education and development of a nation are inextricably linked. The interrelationship has been recognised for long. It is a foregone conclusion that higher education is critical to the nation through teaching, research, and engagement. In the inaugural plenary of the Confederation of Indian Industry’s (CII) Higher Education Summit 2016, recently held in Mumbai, noted economist, Lord Meghnad Desai, talked on the road ahead for the Indian higher education sector. The summit was organised by CII Western Region and Government of Maharashtra, on the topic of higher education as an engine for growth. Corporate Citizen brings to you excerpts of his special address
When I was asked to come here and speak about higher education, I didn’t know if I could contribute much, seeing that I did my higher education out of the country. But the organisers probably thought that my ignorance is my strength, therefore I shall use it as best as I can.
The fact that we are having this seminar, underlines the urgency of the problems faced by higher education in India. Once upon a time people thought about education in idealistic terms- for nation building, character building, etc. Thankfully, now we speak of it in instrumental terms. Higher education is necessary for the economy, for equipping individuals for jobs, and the economy to gain from the productivity that results from higher education. Now, In India there is a large system of wide access but low quality. There are a few good institutions (Like the IIT's and IIM's and some private institutes) but students need outrageously high scores to get into these colleges. I feel any exam in which you need to score 100 out of 100 is not worth taking, because that is not a test of intelligence, it is a test of memory. We have created a system where there is excess demand for high quality institutions, which are very few. There are plenty of other institutes but their quality is very low. In this process, we have created a class divide.
There is one example we can take from the British system, which found a way to increase access to higher education. I say this from personal experience as I have lived through that period. When I got to the UK, they had the Top Universities like Oxford, as well as Polytechnic colleges. In the beginning, Polytechnics was considered to be the choice for less ambitious people, but with time, they themselves began to improve, to compete with Universities. Around 1991, the conservative government came into power. They had promised increase in access to higher education before coming to power, and they planned to extend access from 20% to 50% of the cohort. They made all polytechnic colleges into Universities, all technical colleges into Polytechnics, which gave these institutes access to more resources and credibility to train students and attract more people from poorer sections, more women, and minorities.
Another thing noticed was that most students were getting access to higher education at a very low cost. This led to these institutes being severely underfunded and a dip in quality was seen. Most people have this belief that if something is publically provided, it should be free or cost very low. Twenty percent of people have access to the best education, and the rest do not. I think we should make those other people pay for the education too. In the UK, we succeeded in that. Students from poorer sections got access to income-contingent loans, which are loans which have to be paid back only if the student graduates and earns a certain amount of money, else they are waived off. All University students were extended these loans. This leads to Universities having the financial resources to provide the best infrastructure and staff-which leads to a higher quality of education imparted.
In India, while ample Universities are set up, there are not adequate resources that need to be available to these institutes. Graduates of some universities pay Rs 15,000 as fees per year. I'm sure students pay more for cappuccino than they do for their education. It’s shocking that education is so undervalued. In the case of Private universities, they charge 2 lakh rupees for the same course. In my opinion, public universities are severely undervalued. Their quality will deteriorate until someone either puts more money into these universities from public budgets, or make people pay for their higher education. If people can spend large amounts of money on their daily consumption items, they should be made to pay for their higher education.
The strength of the education system also matters. The American system of education is much more democratic than the British system. There are junior colleges, state colleges, private universities, etc. Since the beginning itself, this system was set up so that everybody gets 2-3 years of higher education after school. Students can start working and come back anytime to finish their courses. There is no immediate need for 3-4 years of degree courses after school. There should be provision for students to pick up education in bits and pieces in India too. It can also be made feasible for a student to go from one university to another conveniently, using academic credits which are easily transferable. This way students won’t be confined to one university for four years.
There should be provision for students to pick up education in bits and pieces, without being tied down for 3-4 years. A student should be able to go from one university to another conveniently using academic credits, which are easily transferable
I shall now come to my last point. In the United States and increasingly in other countries, online education is very important and its availability must be increased. Once you have Google, why do you need universities? Universities can only give you information. Very few universities have time to give you knowledge. If you have Google, and you know how to read and write, why do you need to sit in a classroom and teaching in an impassioned way? It may be possible that we could liberate the system by having a system of some very good people teaching online courses. This is already happening in Stanford and Harvard and other top universities. We could have people access the best quality of education online wherever they are in the world. This would liberate them from having to go to universities which are not worth going to.
In conclusion, I think a lot can be done for education in India by either pumping in resources from public spends or making the students pay for their education, or utilizing technology, and reducing the dependence on the old fashioned and sometimes archaic system of education that we currently have.
By Rajesh Rao and Neeraj Varty
