LAUNCH OF RAMJAS ECONOMIC REVIEW
VOLUME VI
The 8th of October, 2024, marked the day when the Editorial Board of Ramjas Economic Review released the 6th volume of its annual academic journal, the pride of the college’s Economics Department. The journal launch celebration was distinguished by the presence of Prof. Sabyasachi Kar, RBI Chair Professor at the Institute of Economic Growth, Delhi, for a lecture and interactive discussion on the topic “India’s Macroeconomy: Issues and Challenges.”
After presenting the Guest of Honour with a small token of respect, the proceedings began with a short address to the audience by Dr. Alok Dash, whose guidance was crucial to this volume of RER, as he reflected on the journal’s evolution- from starting off as a magazine in 2004 to now standing as an ISSN certified peer reviewed international academic journal for undergraduate students of economics. Prof. Dash extended a warm welcome to all attendees and congratulated the Editorial Board, the faculty, and the students for the successful creation and publication of yet another volume of Ramjas Economic Review. Thereafter, our Editor-In-Chief, Amal Varghese, shared a brief message on the year-long journey and efforts that made this volume a reality, extending gratitude to the authors, professors, faculty reviewers, and alumni mentors.​​
The lecture by Prof. Kar commenced as he encouraged students to not stay limited to classroom learning by taking textbooks for granted as there exist significant gaps between theory and the real world, especially in the discipline of economics. He shed light on how stagnant the global economy was until the industrial revolution, when the growth rate was about 6% per 100 years. Later also, globally we were able to grow only at 1-2% per year, but it did have an impact as it was spread over a large period. Examples of different growth stories were given, like Asian Tiger Nations, Tiger cub nations etc. which led us to ponder if growth comes naturally to underdeveloped countries, or is it a rare phenomenon? To look into this, Prof. Kar gave us a graphical explanation that served as evidence that only 3 peculiar kinds of nations (small island countries; oil-based countries; east European countries) were able to reach high income status, South Korea being the sole exception, hence offering very little to learn for normal developing nations.
Unlike the popular mathematical growth models, he introduced us to two intuitive growth models: the growth episodes model and the economic complexity model. These models essentially propose that investments are the first step for nations trying to get out of the low income trap and become a richer country. But as they climb up the ladder, investments alone become insufficient. This is because growth does not come solely from producing more of the same kinds of products, but from diversifying and venturing into the production of more sophisticated products and building new technology and complicated institutions.
Prof. Kar then introduced us to the threefold challenges faced by the developing countries on their growth path, aptly termed as
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The political problem- which stems from the fact that reforms are influenced by politics, and the interests of politicians might create barriers to good policy,
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The design problem- as each country is different, and needs to experiment and develop tailor-made institutions for itself in its own style and
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The capacity problem- the need for an in-depth and clear cut understanding of how processes work within the government to get into complicated product spaces.
Coming to India’s reform policies for sustained growth, they can be majorly classified into four types: product market reforms, factor market reforms, push for infrastructure development, and institutional reforms. Subsequently, each of these reforms was elucidated in detail.​
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The product market reforms were some of the most successful reforms in India, and they also didn’t encounter many problems of the types discussed previously. Even though they triggered the first growth boom during the pro-market economic liberalisation in the early nineties, the growth boom started slowing down in the late nineties. This can be explained by the heavy reliance of the performance of product markets on the efficiency of factor markets, infrastructure, and institutions, making them less able to carry the burden of growth alone.
Factor market reforms have been the biggest challenge in India. Reforms on land and the labour market were attempted from time to time but were frequently met with political problems. Another issue is that sudden shocks in any market system make the marginalised sections more vulnerable. Hence, major reforms, particularly in factor markets, need to go hand in hand with some kind of safety nets that would take care of the vulnerable and prevent their defiance towards reforms.
Infrastructure reforms also faced design problems and political constraints. One of the states from South India served as an example of how political problems arise, as decisions on investment in capital changed when the incumbent party lost the elections. Such issues make the private sector more averse towards investing in various projects.
Institutional reforms haven’t been explored much in India, largely due to political dissents and also capacity problems in state level institutions as they lack expertise and experience. Capacity also needs to be distributed among different institutions, like how Orissa’s specialisation in cyclone management can be learnt from by other similar institutions. Prof. Kar identified the drawback in the main Indian narrative, which denies institutions the opportunities for improvement with the demand for perfection. Instead of completely rejecting and shutting down an institution when something goes wrong, they need to be given permission to learn from their mistakes for their own betterment.
A comprehensive explanation of what India actually needs to do for sustained long term growth was then worked out with all due considerations expounded before. As much as we’d like to take shortcuts, we need to get to work and solve these core problems that are directly or indirectly preventing our growth. Political constraints must be overcome with robust political consensus, even across parties. Poised experimentation and showing patience with failure are the keys to solving design problems. When it comes to capacity constraints, it is correctly directed incentives that are the need of the hour. Incentive structure actually hasn’t been worked on vigorously enough ever since we had our established democracy after British rule. Our democracy needs to step up to an ‘enabled progress’ from the current ‘controlled progress’, wherein growth holds hands with the investors of growth, solving each other's issues rather than creating more hurdles.
​The talk was followed by an interactive Q&A session as the enthusiastic audience raised their curiosities and doubts before the speaker. The discussion was led by the professors, Dr. Lokendra Kumawat, Dr. Sonia Goel, Dr. Mihir Pandey and Mr. Vijay Kumar with their intricate and thought provoking questions on the issues of financing, safety nets, demand constraints, etc., which further encouraged the students in our audience to think deeply and raise their doubts and queries as well. Prof. Kar patiently answered the questions with concise statements and convincing arguments, thereby concluding the insightful session on the issues and challenges of the Indian macroeconomy.
Thereafter, we proceeded with the long awaited release of our academic journal. The faculty members and editorial board members assembled together as Prof. Sabyasachi Kar formally launched Ramjas Economic Review, Volume VI, which was then published and made available on the journal’s official website.​
The editorial board then presented a tribute to Dr. Mihir Pandey as a gesture of gratitude before his retirement from RER and Ramjas. Ever since the very first volume of RER and even before, Mihir Sir has been that pillar of support to the journal, without which it wouldn’t be what it is today. We shared with our audience a few messages from our alumni, who all recalled fond memories of his unwavering guidance and support during their time on the editorial board. Furthermore, we had Sonia ma’am present to sir a humble gift from our side, as we expressed our deepest thanks to him for always being there with us as an encouraging and reliable teacher, mentor, and advisor. After a few words by Mihir sir, the program was officially concluded with the delivery of a vote of thanks.