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An Economist At Home And Abroad
An Economist At Home And Abroad
An Economist At Home And Abroad
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An Economist At Home And Abroad

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Economist, author, government adviser, banker and columnist, Dr Shankar Acharya has led a richly varied professional and personal life spanning continents. An alumnus of Highgate School (London), Oxford and Harvard, Dr Acharya worked at the World Bank for a decade before joining the Ministry of Finance as economic adviser where he crafted finance minister V.P. Singh's path-breaking long-term fiscal policy, which ushered in the MODVAT. After a brief deputation overseas in 1991-92 he returned as the country's longest-serving chief economic adviser to ministers Manmohan Singh, P. Chidambaram and Yashwant Sinha. Since 2001, he has undertaken a variety of assignments, which include his twelve-year long chairmanship of Kotak Mahindra Bank, stints as a member of the Twelfth Finance Commission and the National Security Advisory Board and columnist for a leading economic daily. In May 2020, he was one of the first people to predict the deep economic recession in India following the onset of COVID-19 and the ensuing lockdown.

Written with warmth and a rare honesty, An Economist at Home and Abroad presents the engaging journey of one of the most accomplished policy economists of our times whose views on contentious issues are often the definitive opinion.

LanguageEnglish
Release dateAug 23, 2021
ISBN9789354227820
An Economist At Home And Abroad

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    An Economist At Home And Abroad - Shankar Acharya

    Preface

    THIS BOOK WAS BIRTHED by the global Covid-19 pandemic of 2020, and its associated features of the lockdown and, later, the self-isolation recommended for the elderly. I expect quite a large number of books were started during this prolonged period of partially voluntary ‘house arrest’, though perhaps not all were finished. For me, there was a limit to the hundreds of hours I spent watching Netflix, Amazon, YouTube and webinars, and reading books, newspapers and endless streams of jokes, information and trivia on WhatsApp. After about three months, around June 2020, the creative juices began to churn and propelled me from the lounge chair in front of the TV to my desktop.

    There were other prods to embark on these memoirs. Quite a few friends and family members, for quite some time, had been suggesting I write a book. Among those who were more insistent, were our daughter, Ta, who wanted to know more about the first forty years of her parents’ lives; old friend Isher Ahluwalia, who set an astonishing example by completing her own life story in the last few months of her tragically shortened life; childhood friends, Ravi Bhoothalingam and Pabi Wadhawan, who wanted to revisit our early years in Delhi of the 1950s; and Indian Council for Research on International Economy Relations (ICRIER) colleague and friend, Amita Batra, who wanted to know more about the lives of an earlier generation of middle-class professionals in India.

    So, from the middle of June, I sat down before my desktop for a few hours every day and started this act of remembering, aided by some photo albums, a bit of Google research and Ta’s prodigious memory of the four most recent decades. As chapters rolled out, I circulated the drafts among close family members and friends, and received tremendous encouragement to continue with the enterprise. Remembering, writing and sharing became a rewarding daily activity, which gained momentum and generated the necessary discipline to persevere. Initially, I simply intended to put my memories together in a document for a few dozen family members and friends—for our mutual benefit and entertainment. Perhaps halfway through the manuscript, I began to get serious encouragement and recommendations from this ‘inner circle’ to aim for eventual publication.

    As my writing progressed, I leaned towards accepting this recommendation—though with some trepidation. Everyone has a life story to tell. But only a small minority of these stories are interesting for those outside a limited circle of family and close friends. I ventured to think that mine might just slip into that select category for a few reasons. First, thanks to parental circumstances, I attended school and university across three different countries (India, Britain and America) on three different continents, which meant that my formative years were intrinsically cross-cultural. Second, for over twenty-three continuous years, from my early teens to my mid-thirties, I lived, studied and worked outside India. This meant when my wife and I returned to India, in the early 1980s, we had the benefit of looking at our home country from the outside—but now faced the challenges of reintegrating into our own society and regenerating our original roots. Third, during those twenty-three years in an English boarding school, Oxford, Harvard and the World Bank, I formed an eclectic set of friends—quite a few of whom later became prominent in India, UK, Myanmar (formerly known as Burma) and Sri Lanka. Fourth, while I had trained as an economist, I was fortunate to pursue and experience a variety of occupations: A decade in the World Bank, as an economics scholar back in India, as a senior adviser to the Union Government during two decades of serious economic change and policy reforms, as a regular columnist for one of India’s best financial papers and as chairman of the country’s fastest-growing private bank for a dozen years.

    Taking all this together, I dare to think that this personal account of my life journey might just hold some interest for a wider set of people outside my immediate family and friends. I certainly hope so.

    1

    Childhood Snapshots

    ADISTINCTIVE FEATURE OF my childhood—and indeed, of my life till my mid-thirties—was its peripatetic nature. Every second or third year, we would find ourselves living in a different place. This was quite common among children of families where the parents, usually the father, worked in India’s elite civil services. My father (Bejoy Krishna Acharya, henceforth referred to as Baba) was in the Bengal cadre of the Indian Civil Service (ICS), 1936 batch. It was only much later that I understood that this nomadic life was not the norm, at least as far as the vast majority of humanity was concerned. Most people spent their childhoods in the town or village where they were born. Most had a ‘family home’, which often anchored much of their lives. But that was not the case for my brother, Sanjoy (six years older, whom I call Dada), and me.

    I was born in our government-provided house in Heysham Road in Kolkata (then Calcutta) on a Sunday in October 1945. For obvious reasons, I have no memory of the place. Nor was I aware that I had arrived on this planet just weeks after the greatest global war to date had ended, and just two years after the Great Bengal Famine had killed perhaps some 2 million people—thanks, in large measure, to the deliberate British policy of commandeering nearly all railway rolling stock for their war effort against the Japanese on India’s eastern front, to the exclusion of grain shipments to areas of harvest failure in Bengal.

    With Acharya as our family name, my parents thought it would be a good idea to name me Shankar. After all, Shankaracharya had a certain historico-cultural resonance in India. When I was around five years old, and suffering from a bout of sibling rivalry, I complained that Dada had a middle name, Kumar, and I agitated for some parity. My parents relented, and inserted Nath as my middle name, thus spoiling their original plan. Much later, I also realized that my childish contention had been a bad idea. So I slowly dropped the use of Nath, but could not do so entirely as too many legal and identification documents now had it enshrined.

    My earliest—and faintest—memory, greatly reinforced by a couple of surviving snapshots, was of being on a lake in a boat. Apparently, this was in Tripura, a small princely state in the north-east of India, where Baba was posted as Acting Dewan in late 1947, during Sardar Patel’s tremendous enterprise of integrating India’s 500-plus princely states into the Indian Union. The lake was part of the Maharaja’s luxurious Neermahal palace and estate, about 50 kms from Agartala, where Dada assures me that the bathrooms had bidets and gold-plated taps. The Acting Dewan and his family were housed in the east wing of the Kunjobon Palace in Agartala. I also have faint memories of two much-squished soft toys of a puppy and a bunny, called Khedi and Penchi. These, I am reliably informed, one day fell into the lake at Neermahal. The palace staff were mobilized and searched diligently using long boat hooks among the ubiquitous water lilies, managing to rescue Khedi, who gave me comfort for a few more years. Penchi was irretrievably and tragically lost forever.

    From Tripura, we moved to Darjeeling, where Baba was posted as District Magistrate (DM) for a year or so. Fifty years later, on a private visit to the city, I visited the DM’s office to see his name, B.K. Acharya, inscribed on the board behind the DM’s desk. Oddly, I have almost no memories of Darjeeling from my time there. Based on parental accounts, I recall only two events. First, I was given a small guinea pig as a present, which I managed to almost suffocate to death by hugging it excessively. The other matter, of greater significance, was my father’s success in negotiating an amicable end to what might be called the ‘first Gurkha rebellion’ without a single shot having been fired. He had to face down armed leaders of the movement and work out a deal with them, supported only by the local police—quite an achievement for a thirty-five-year-old.

    In 1949, we were in Delhi for a year, with Baba posted as a Deputy Secretary in the Ministry of Civil Supplies, a significant ministry in those years of post-Partition food distribution and rationing. We were allotted two rooms in the stately Western Court on Queens Way (now Janpath), along with several other young officers and their families. I was sent to Miss Hartley’s kindergarten school for my first experience with formal schooling. I think I was dropped to school and picked up by either by my father or mother in our car.

    I have a clearer memory of the car, a 1948 Chevrolet, purchased by my father from his share of the sale of his paternal home on Harrison Road, Kolkata. I probably remember the car because of a close encounter I once had. One day, on the way to school, my father (or mother) had to brake suddenly. I was in the seat next to the driver and was thrown forward against the dashboard, cutting open my lip. This was decades before seatbelts became standard issue in cars.

    I don’t recollect much of what we did in school or of my interactions with the other children. Except for one traumatic incident. As the months passed, my parents noticed that I became very reluctant to go to school, and had even started throwing up on the way there. Investigations revealed the following. At school, wearing my shorts and shirt, I used to be seated next to a Sikh girl with striking double-looped pigtails, who developed a proclivity to pinching my thighs—whether motivated by strong affection or sadism, or simple bullying, I never found out. I bore this trial timidly and stoically, until the vomiting syndrome developed and my parents intervened and took the matter to the class teacher. The teacher’s solution was simple and effective: Change the seating. Luckily, there were no lasting scars as far as my attitude to the opposite sex in later years was concerned.

    Back at Western Court, we had no lack of playmates in the children of other young government officers. One of them, Gautam Datta, I got to know better later in life as a friend. In the evenings, all four of us in my family often played board games such as ludo and snakes and ladders. There was no TV and we did not own a radio. On weekends, we would sometimes go on picnics with a few other families to ‘distant’ places like Hauz Khas and Qutb Minar.

    In 1950, we were back in Kolkata, ensconced in the large house allotted to the DM of Howrah. I completed standard one at St. Thomas school there, winning my first school prize. In Kolkata, this time around, I began to relate more to some of my relatives, especially my mother’s family, spread over eight small flats in her father’s house (my Dadu’s) on Darga Road, near Don Bosco school. My special favourites were my uncle, Bhaiya Mama, and his wife, Minu Mami. They were childless, and showered affection on Dada and me. Dadu, who had lost his wife when my mother was only seven, was a benevolent presence in the household. He had retired from the Indian Education Service. For many years, he had been principal of Patna Science College, from where my mother, Nilima, earned her physics degree in the mid-1930s, probably one of the first female graduates in physics in the country.

    On Baba’s side, it was his elder brother, Ajay, a gynaecologist, my older cousins, Jayanta-da and Atashi, and my paternal grandmother, or Thakurma, who lived with them in their home in Shebak Baidya whom we spent time with. Thakurma had been widowed since 1936 and observed strict white sari attire and a spartan, Vaishnavite diet. To us she was always very affectionate and indulgent. Dada and Atashi were only two years apart, and were quite chummy; I was six–eight years younger and in no way a peer. My close cousin-friend came from the line of my Pishima (Baba’s sister, but fifteen years older than him). Pishima, Usha Haldar, was also a widow (of another ICS officer) and lived with her only child, my cousin Lakhi-di, and her husband, Mohit Mukherji, a senior Railways officer. Lakhi-di’s only child, Nandita, was actually my niece, but two years older than me because of the big age gap between my father and Pishima. From those early years, Nandita and I developed a close friendship, which has endured for seven decades now.

    Sometime towards the end of 1950, Baba moved to the West Bengal government’s Ministry of Civil Supplies and we shifted to a government flat in Ekdalia Place. Those two Kolkata years, 1949–51, were my years of closest contact with the Bengali language and culture. I had developed an early fondness for reading in both English and Bengali, and recall spending many hours enthralled by the Ramayana and Mahabharata in Bengali. I saw them as unmatched adventure stories, with strong overtones of good vs evil. Mama and Mami indulged me by allowing me to read out loud from these fascinating epics whenever I spent some days with them. Sadly, my written Bengali skills peaked at the age of six! It was during my holidays with my Mama and Mami that I also learned to play carom and became quite good at it. And I also loved the very special chicken cutlets that Mami often cooked for us.

    At cousin/niece Nandita’s home, the preferred game was Chinese checkers. She and her family lived in one of those spacious quarters allotted to senior officers in the railways, with large grounds in which their dachshund, Fritz, would roam freely. Family dynamics were generally warm, but with undercurrents of tensions and jealousies, which I was largely ignorant of at that stage, but came to understand slowly as the years unfolded. During visits, aside from Chinese checkers, we would often play word-making with those little cardboard letters, and other games. Nandita and I also began to share a love of books, especially Enid Blyton and Richmal Crompton.

    Sometime in 1951, we made a long and interesting car trip to the Damodar River Valley Project, where we visited a number of new dams and power stations, including those at Maithon, Panchet and Tilaiya, the barrage at Durgapur and the Bokaro complex. Whenever I come across the old, once-popular phrase ‘temples of modern India’, the images of these dams come to mind.

    In 1951, our family ‘went international’, in a manner of speaking, when Baba was posted as Deputy High Commissioner to Dhaka, the capital of East Pakistan, on loan to the fledgling Indian Foreign Service (IFS). Our three years there were a whole new chapter in our lives, partly because East Bengal was both different and familiar at once, and partly because I grew from six to nine years of age there, gradually absorbing more about the world outside of home and school. We lived in a charming old mansion, Baitul-Aman, with spacious gardens and a separate building for official entertainment, on the road to the old airport. The entrance was manned by armed guards from India.

    I was admitted to the Holy Cross Convent school, meant mainly for girls, but taking boys up to the age of ten. Dada was dispatched to the famous boarding school in Darjeeling, St. Paul’s, on the top of Jalapahar Hill. This made me an ‘only child’ at home, with both its pluses and minuses. I don’t recall much about school in Dhaka other than a close friend, Ashfaq, who often came over to play after school, provided he got permission from his parents, which was sometimes denied to moderate fraternization with the enemy! Some sixty years later, I met the Bangladeshi High Commissioner in Delhi, Tariq Karim, at a dinner, and our conversation soon established that we had been classmates at Holy Cross in the early 1950s!

    The Indian mission in Dhaka was quite large, especially on the consular side, and there were fairly close interactions among the families of senior officers. Sometimes, in small groups, we would head out for weekend trips on board steamers and launches ‘up river’ on the vast rivers and tributaries of the enormous delta of the Ganges and Brahmaputra. For Baba and his officers, these trips combined work with pleasure. For the spouses and the children, it was pure fun. It was on these trips that I watched my parents play bridge and learnt the rudiments of the game. The riverine scene was a wonderland, as we watched the crew navigate perilous shoals and batten down the hatches when monsoon storm clouds gathered menacingly. At the confluence of the Meghna and Padma, the distance between the banks was several kilometres, and the waves whipped up by a storm could threaten even steamers, let alone the much smaller launches. In the many decades after, despite substantial world travel, I have never encountered again the sheer grandness of the rivers of Bengal.

    On the longer trips in the bigger boats, the families would gather on the upper deck before sundown to socialize. Often Baba, who had a lovely baritone voice, would lead the group in river songs of Tagore, like ‘Kharo bayu boye bege … ’ and the great Bhatiali/Baul folk songs of Bengal like ‘O amar daradi … ’ Unfortunately, those musical gifts escaped me entirely, though luckily Dada got some of them. Which is why, at eighty-plus, he still sings in small local choirs in Canada, where he has been long settled.

    After a year or so in Dhaka, I was rudely uprooted from this pleasant existence and sent off in March 1953, at the tender age of seven, to begin the academic year in the junior school of St. Paul’s in Darjeeling. Dada was settled in the senior school, and became a guardian of sorts. I say ‘of sorts’ because interaction between the junior and senior schools was not permitted, except for limited outings on Sundays. March was not a pleasant time to start school atop Jalapahar at 8000 feet, with cold winds whipping through the playgrounds and other open areas where we assembled for various daily activities. Moreover, us juniors had to wear shorts as our uniform, which exposed our knees and thighs to the freezing cold. The fantastic views of the glorious Kanchenjunga mountain from our dormitory windows were not adequate compensation for the many hardships of boarding school life at that altitude! I was frankly miserable, and two months into the first three-month term (or semester), I wrote desperate letters home (in Bengali, to avoid routine censorship by the typically Anglo-Indian ‘misses’ who ruled our lives) asking to be returned home to Dhaka. My pleas must have been sufficiently pathetic, because my parents took me home after my first term ended around June.

    The remaining year and a half in Dhaka proceeded much the same as the previous ones had. As the only child at home, I was sometimes taken to events where eight-year-olds don’t normally figure. For example, I recall a semi-formal lunch given by the avuncular English Governor of East Pakistan, Sir Thomas Ellis, for just our family. While having soup from fine china bowls, my melba toast snapped and flew halfway across the room. Ellis was a perfect host and pretended not to notice. When the soufflé dessert arrived, I was nervous about the fine bird’s nest on top. The Governor assured me that it was made from caramelized sugar and was quite delicious. He was right. On another occasion, my mother took me to the famous Dhaka Club to play housie-housie (bingo or tambola) with the ladies. To keep me occupied, I was given a typical slip with numbers. Much to my delight, and to applause from the ladies, I won the first round. Unfortunately, my subsequent encounters with games of chance have been far less successful.

    The saddest incident I can recall is when one of the nicer guards at Baitul-Aman fell down from the large jackfruit tree in our garden and broke his neck.

    During this period, we made a couple of trips (by road, boat and elephant-back) to Kaoraid, about 80 kms north of Dhaka. This little town (or big village) was the seat of the old Gupta zamindari, a well-established and progressive family of Brahmo Samajis (a nineteenth-century reform movement within Hinduism, founded by Raja Ram Mohan Roy) into which my Thakurda, Pran Krishna Acharya, had married in 1894. He himself came from a modest, sometimes impoverished, rural background in Pabna district, and had made it to Kolkata through sheer intelligence and application, winning scholarships all the way to earning his medical degree in Calcutta Medical College and becoming one of the city’s top three doctors, with a large charitable practice. He was also a leading member of the Brahmo Samaj in Kolkata. His ashes are buried in the family graveyard of the Kaoraid Guptas, which includes some other well-known figures, like Sir K.G. Gupta and the poet–lyricist Atul Prasad Sen.

    My childhood memory of the place is blurry, of a large semi-abandoned mansion with a small Brahmo mandir, with an adjacent graveyard filled with tombstones. When I visited the place fifty years later, on a private trip, the mansion was not to be seen, but the mandir and graveyard remained, tended to by the sole remaining family of Hindu-Brahmos in a fairly prosperous village of about 4000 Muslim residents. The school I visited, originally founded by the Guptas, was large, well-kept and full of bright-eyed students. The elderly government principal spoke warmly of the educational initiatives and charities of the Guptas in the long-gone decades … But perhaps he knew I had a family connection.

    During the Dhaka years, we made frequent trips to Kolkata, partly for Baba’s work and partly to meet with relatives. On one of those occasions, the parental story goes, a younger cousin of Baba’s, who worked in the creative side of a well-known advertising firm, approached my parents for the ‘loan’ of their younger son (that was me) for a few months to play a key role in a feature movie he was making — his first such venture. He thought I would suit the part well. My parents, concerned about disrupting of my trajectory in school, declined politely. The film was Pather Panchali, the role was of Apu and the cousin was Satyajit Ray! Probably just as well, as I may have scuttled Ray’s stellar career as a movie director, without establishing mine as a screen actor. The boy who played the role of Apu did a fantastic job.

    In retrospect, I can only marvel at how sheltered my life was during those Dhaka years. I had no inkling or understanding of the powerful political currents that were swirling around in the province and its capital. After all, those were the years of surging Bengali language nationalism and the rise of the Awami League, led by Abdul Bhashani, culminating in the League’s sweeping defeat of the Pakistan Muslim League in the 1954 provincial elections. Later, I learnt that my father, with his finger on the East Bengali pulse, had predicted the victory against the conventional wisdom prevailing in the Ministry of External Affairs (MEA) in Delhi and our High Commission in Karachi. This brought him to the attention of Pandit Jawaharlal Nehru, who persuaded him to make the switch from the domestic civil service cadre to the IFS.

    Our stint in Dhaka ended towards the end of 1954, and we were promptly dispatched to Cambodia, a country which had just been reborn following the 1954 Geneva Accords signed after the historic defeat of French colonial forces by the Viet Minh led by the famed General Vo Nguyen Giap at Dien Bien Phu in Vietnam in May that year. Baba was tasked with opening the Indian diplomatic mission there, initially as a Legation headed by a minister, rather than by a full ambassador. Dada continued into his final, Senior Cambridge year at St. Paul’s, and I accompanied him into the fourth and final year of junior school. This time, I was two years older and was determined to see the full year through.

    It went off reasonably well. I did well scholastically and, though I did not make any life-long friends there, I was not miserable. My class teacher liked me and, for some reason best known to her, nick-named me ‘baby mongoose’. On Sundays, Dada would pick me up from the junior school and we would take the shortcuts downhill to Darjeeling town, usually to spend the day with some distant cousins, the Boses, including their sixteen-year-old son, Arup. The Boses were nice to us, treating us to tasty home food, a real pleasure after the institutional fare served up at school. Darjeeling was a very pleasant, uncrowded place to wander around in those years, with magnificent views at every corner. When the school chapel bell began to toll, we would scramble up the shortcuts on the path to Jalapahar and arrive in time for the 6 p.m. evensong service, as required.

    During the brief inter-semester breaks, Dada and I counted on the generous hospitality of Mama and Mami, who would time their visits to Takdah, some 30 kms away. There, we had access to Dadu’s holiday home, comprising five small cottages, each named after his wife and progeny. We would typically stay with Mama and Mami in one of them. The cottages were really in the wild, with just a couple of provision stores and a few other country homes nearby. We loved the little treks up and down the pine-covered hillsides, returning tired and happy at sunset to burn off the leeches which inevitably clung to our legs. In the evenings, we would play cards, sing songs or tell stories in the light of petromax lanterns (there was no electricity in Takdah in those years). Some years later, the Indian Army requisitioned these cottages for their purposes.

    The school year ended in December and I returned to Kolkata. In a few days, I boarded a flight with my parents to Phnom Penh with a brief stopover in Bangkok. My recollection of Bangkok in early 1956 was of a poor, populous Asian city—with roughly the same standard of living as Kolkata, if not lower. For some reason, Dada joined us a few days later.

    My few weeks in Phnom Penh were quite action-packed with new sights and events to take in. I recall the first India Fair being held then. It was opened by the young Crown Prince Norodom Sihanouk. At that function, I was given the honour of presenting him with a welcoming ivory chess set on behalf of the India Fair. There is a photo of me in a pair of trousers and a white shirt, with my tie a little askew, making the presentation to the immaculately attired, suave young prince bending down graciously to accept it, with my parents looking elegant in bandhgala and sari looking on smiling. Coterminous with the India Fair was the dispatch by our government of a prototype of the first trainer aircraft built by Hindustan Aeronautics Ltd, the HT-2. At a special air show, the plane went through its aerobatics in the presence of Cambodian dignitaries. I was thrilled, but I don’t know if the Cambodian government ordered any.

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