Congress loyalists and their kin have been rewarded with a position in Tamil Nadu’s Economic Advisory Council. On Monday, Governor Banwarilal Purohit announced the members of the new economic advisory council to the chief minister, which include Sonia Gandhi’s aide Jean Dreze, former RBI governor Raghuram Rajan, Nobel laureate Esther Duflo, former CEA Arvind Subramanian, and former Union Finance Secretary S Narayan.
In a speech at the Legislative Assembly on Monday, Purohit said the council will chalk up a plan to reverse the economic slowdown and put the state on the growth path. The panel is part of an effort to base the government’s economic decisions on the strong foundation of data. The government will release a white paper on state finances in July, the Governor said.
“In recent years, we have seen a slowdown in Tamil Nadu’s economic growth rate. This government will make all efforts to reverse this trend and usher in a period of rapid economic growth taking full advantage of the available limited window of the demographic dividend. To chart out a rapid and inclusive economic growth path for the state, the Government of Tamil Nadu will constitute an ‘Economic Advisory Council to the Chief Minister’ with the leading experts from all over the world as its members,” the Governor said.
Purohit said an expert committee comprising of industrialists, banking and financial experts and government officials will be formed to formulate schemes to revive MSMEs. He said the economic advisory committee and other groups would study the financial situation of the state and changes will be made accordingly to make the state’s economy stronger.
It is worth noting that Tamil Nadu is facing an acute debt crisis for years now even as successive governments have cast it aside and continued with their welfare schemes. In February 2021, the interim budget presented by O Panneerselvam pegged the state’s debt for the year 2021-22 at a whopping Rs 5 lakh crores and the state was also expected to suffer a widening revenue deficit as State’s own Tax Revenue was presumed to take an 18% decline as a result of the downturn induced by the pandemic.
The appointment of the Economic Advisory Council, members of whom are largely sympathetic to the Congress party, comes in the aftermath of Rahul Gandhi and Sonia Gandhi’s meeting with Tamil Nadu chief minister MK Stalin. Last week on Saturday, Sonia Gandhi and Rahul Gandhi met MK Stalin for the first time after the Assembly poll results were declared on May 2. Congress is an alliance partner in the DMK’s government in Tamil Nadu.
Jean Dreze, Raghuram Rajan, Esther Duflo, Arvind Subramanian and their partisan prejudice
Though Jean Dreze is touted as a development economist, he is long considered a sidekick of interim Congress president Sonia Gandhi. Dreze was also a member of Sonia Gandhi’s NAC and had on occasions resorted to peddling lies to project the BJP government at the centre in poor light.
Former RBI governor Raghuram Rajan has made no bones about his political preferences. He was appointed to the position of RBI governor by former Prime Minister Manmohan Singh during the UPA regime and since then he has been a vocal supporter of the policies implemented by the Congress party. Rajan had also participated in video conferences with senior Congress leader Rahul Gandhi where he used his bully pulpit to criticise the current central government.
Another member of the Economic Advisory Council is Esther Duflo, the wife of Nobel Laureate Dr Abhijit Banerjee, an economist who advised Congress on the ill-conceived NYAY. In the run-up to the Lok Sabha elections 2019, then Congress had announced in its manifesto a “Minimum Income Guarantee Scheme”- formally called Nyuntam Aay Yojana (NYAY), to five crore ‘poorest families’ covering 25 crore people by assuring them a guaranteed minimum income of ₹6,000 per month or ₹72,000 a year.
However, the exact amount promised kept changing with every rally of Rahul Gandhi. Sometimes it became ₹ 72,000 annually, sometimes it was ₹72,000 monthly. Esther Duflo had also signed a letter expressing concerns over ‘political interference’ in India’s statistical data over GDP measurement.
Furthermore, the Advisory Council included the former Chief Economic Advisor Arvind Subramanian, who is considered close to the Congress party. Subramanian in 2019 had accused the Modi government of overestimating the country’s GDP figures. However, shortly after his allegations, the Centre trashed his analysis and said that the GDP calculation system was revised in line with the international standards.