One of the country’s most important economists on globalisation and how he expects India to catch up ‘with China within 20 or 30 years
10 hours ago by: James Crabtree
Arvind Subramanian owes both his job and his plush New Delhi residence to the same man: India’s prime minister Narendra Modi. Having been hired as the government’s chief economic adviser in 2014, he hurriedly departed from his role at a US think-tank and moved back home, only to find himself lodged temporarily in a humdrum guest house. “The prime minister was very sweet,” he says. “He rang the housing minister, and said, ‘I want him to get a very nice house.’” And on this at least, Modi delivered.
Subramanian now lives in New Moti Bagh: a leafy estate in the heart of the capital, where grace-and-favour bungalows are granted only to elite civil servants, making it arguably the most powerful neighbourhood in India. “This place has been called the new Forbidden City,” he says, in reference to the walled imperial palace in Beijing, the heart of Chinese government for five centuries. India’s equivalent is less forbidding: a compound of 116 white bungalows and 10 apartment blocks nestled amid pleasant parks, through which the resident officials, judges and military top brass go for their morning walks.
Subramanian is sitting in the spacious living room of his own six-bedroom, two-storey home, dressed in a white linen shirt, black jeans and brown leather loafers. At 57, he looks trim and speaks with rapid, Tigger-ish energy. Outside, the mid-afternoon sunshine is falling on his front garden, whose verges are filled with lush green shrubs.The house resembles a colonial-era bungalow, with a roof terrace on the second floor and two sets of servants’ quarters at the rear. It is actually newer than it looks, he says: the entire area was rebuilt about a decade ago, hence the “new” in New Moti Bagh. Though spartan when he arrived — “there was maybe a wooden bed, a cabinet, but basically nothing else” — the interior is now pleasantly decorated with furniture he and his wife Parul shipped back from Washington DC, including a series of Impressionist-style paintings by his elderly father, a retired civil servant. Sitting room of Arvind Subramanian’s home in New Delhi
The move to New Delhi did not feel alien, Subramanian says, given that he studied there as a teenager at St Stephen’s College, which he calls “the Eton of India”. Yet he had spent most of his adult life abroad, initially studying for a PhD at Oxford university. Stints at Harvard and the International Monetary Fund followed, earning him a reputation as one of India’s most important economists, with notable contributions in trade and development economics.
Returning home, however, did take some adjustment. “Like Washington, Delhi is a city that thrives on power,” he says. “You have to learn how it works.” This meant grappling with India’s combustible politics, but also working within its famously labyrinthine government, where decisions are still made via physical files of paper, tied up with string. “When I first encountered this beast called ‘the file’, I was physically taken aback,” he says, raising his hands in horror. Dining area
He had to learn how to fit into this world in a more delicate sense too. Subramanian’s job involves a tricky balance: he must be a consummate insider, but also an outsider expected to speak freely and bring in new ideas. Another well-known economist, Raghuram Rajan, left his post as central bank governor under a cloud last year, having been perceived to get this balance wrong by being implicitly critical of Modi, a Hindu nationalist leader not known to brook dissent.
Subramanian admits he has learnt to watch his step on delicate topics, in public at least, giving an example of debates about protecting cows, which some conservative Hindus consider sacred. “I was asked for my views on the beef ban in Mumbai and said jokingly that if I speak on this I’ll probably lose my job — and that went on the front page of The Indian Express,” he recalls. “In that case I was told to be a bit more careful.”
That said, he seems happy with his recent record of pushing new thinking, including floating the radical notion of a universal basic income for India. He defends Modi against critics who question the prime minister’s support for economic development too. “He wants to know everything about everything. His stamina for detail is just extraordinary,” Subramanian says. “He’s just obsessed with getting things done.” Family prayer area Desk in the guest bedroom
Modi’s support for globalisation is deeper than most people realise, he adds, a flip side of the fact that India is now a much more open economy than commonly acknowledged. The country’s future growth is not without challenges, however. “We have this whole ambivalence about the private sector which we’ve never really overcome,” he says. Yet he remains bullish, claiming that he expects India to catch up with China “within the next 20 or 30 years or so”.
This will happen even as globalisation is set to slow down somewhat, he argues, albeit only compared with the unusually rapid growth in trade seen during the 2000s. “‘Hyper-globalisation is dead, long live globalisation,’ is how I like to put it,” he says. “If you look crudely at the postwar period, 80 per cent of globalisation is driven by technology, 20 per cent by policy. And that 80 per cent, you can’t stop.” I said jokingly if I speak on the beef ban I’ll probably lose my job. It went on The Indian Express’s front page
Having been in the job for two and a half years, Subramanian plans to stick around in his new home for a few more, although he admits he is already pondering future plans. Here the focus is on producing a “big book” on global development, in the vein of Jared Diamond’s Guns, Germs, and Steel, answering that most basic question: why do some nations grow rich and others languish in poverty?
“They used to say every Indian fiction writer has to first write his Midnight’s Children,” he says, jokingly drawing a comparison with Salman Rushdie’s opus. He gives hints of his basic thesis, which involves problems of plenty, in which nations, such as Egypt, blessed with bountiful resources or fortunate geographies often do less than those, such as Singapore, whose only route to development comes through ingenuity and good institutions. “Countries that are able to manage social conflict are more likely to do well,” he says. “Countries that have for some reason or another had manna from heaven are the countries that tend to do worse.”
I notice his house, for an academic, is relatively light on weighty economics books, most of which remain in the US. But on the desk in his study, next to the living room, there is a well-thumbed copy of String Theory, a book on tennis by the US writer David Foster Wallace. For an otherwise rational economist, Subramanian admits to an almost romantic admiration for Roger Federer, the Swiss multiple grand-slam winner. Subramanian claims to have played the game reasonably well himself for a time, although now he tends to stick to an occasional evening jog through the parks outside his home. “Compare this with anywhere else in India, this is really like [the] new Forbidden City,” he says, gesturing out of the window. “I wake up, I have tea amid greenery. This morning, we were sitting outside with birds chirping. It’s the land of luxury. How could you not like it?”
Favourite thing
Economists are not always known for their love of high culture, but Subramanian has a pleasingly old-fashioned affection for classical music, including a vast collection of cassettes. “When I first came to St Stephen’s, and then when I went to Oxford, I was in this maniac mode of collecting rare recordings,” he says.
The love stems partly from his southern Indian upbringing, a region steeped in traditional “Carnatic” music, but later he also developed an affection for western composers. “Now I am saddled with this,” he says. “But I can’t bear to give it up, because I spent so much time acquiring it.”