Jagdish Bhagwati is University Professor of Economics, Law, and International Affairs at Columbia University and among India’s most eminent economists.
In recent years, the Mumbai-born, Cambridge-educated academic has been broadly supportive of fellow Gujarati prime ministerial candidate Narendra Modi. The 545 recently interviewed him to ask how he sees India’s economic model changing in the next few years.
Despite the BJP’s avowal to steer clear of FDI in multi-brand retail, Bhagwati says that he expects Modi to open up the sector by “after about a year, year and a half” if the prime ministerial frontrunner does come to office. The Padma Bhushan awardee claims that the BJP has not come clean on the issue of FDI, and that it is something that the new government “needs to do.”
The BJP has at best, remained vague on the party’s plans for allowing foreign direct investment (FDI) in retail. While its election manifesto has clearly ruled out FDI in the multi-brand retail sector, Modi recently said that this decision needed to be reviewed.
Defending the “Gujarat model”, recently called the “toffee model” by Rahul Gandhi, Bhagwati said that he was “quite surprised” to find that the state had improved considerably under Modi’s rule. Gujarat’s success shouldn’t be measured in terms of the levels of social indicators, he argued, explaining that instead the focus should be on “first differences.”
In case Modi does come to power, Bhagwati expects him to take forward what Prime Minister Manmohan Singh started: engagement with the East. Although the India-ASEAN Free Trade Agreement continues to hang fire, Bhagwati hopes that a new government in New Delhi will look at furthering economic ties with the region, including the possibility of joining the US-led Trans-Pacific Partnership.
Bhagwati’s three suggestions for the incoming government are straightforward – open up to international trade, encourage foreign investment, and put the controversies surrounding communal violence “to rest.”
According to Bhagwati, this election is being fought more on economic grounds than anything else. In addition, political parties in the country need to build consensus on the economic pathway that India should take.
“I think we need parties with different combinations of these things but basically accepting the lessons of the last 30 years or more,” he said.
“We need a different kind of politics now – where there is broad agreement on where we should position ourselves in terms of our economic and political orientation.”
Devjyot Ghoshal is a professional deadline beater and a multimedia journalist. Currently, he spends time attending lectures at the Columbia Journalism School. He argues with random people @devjyotghoshal
A former crime reporter from New Delhi, nowadays Indrani Basu can be found stopping people on New York streets and asking them their life histories. Tell her yours @IndraniBasu88