Bengaluru: Nobel Prize-winning economist Joseph Stiglitz has a blunt message for Prime Minster Narendra Modi: India has an image problem after the government’s clampdown on non-governmental organizations (NGOs) and its actions against students of Jawaharlal Nehru University (JNU).
“Some issues have got a lot of public attention around the world and are a great deal of concern. One of the big concerns is the difficulties for NGOs to operate in India. It puts India in the same group of countries as Egypt and Russia, and that is not the group of countries that you want to be in," Stiglitz said in Bengaluru on Wednesday.
Sitglitz was in the city to deliver a talk on Global Inequality: Causes and Consequences with economist Branko Milanovic.
For over a year now, NGOs have been on the National Democratic Alliance (NDA) government’s radar after intelligence agencies allegedly reported that some of them were impeding India’s economic growth by campaigning on environmental and health aspects of power projects, mining and genetically modified food.
In 2015, the Modi government barred the environmental group Greenpeace India from receiving foreign funds on the grounds that it has “prejudicially affected economic interest of the state". It also placed the Ford Foundation on a watch list and ordered all funds for the US-based non-profit organization to be routed to recipients only after the home ministry’s approval.
Stiglitz, a professor at Columbia University in New York City and former chief economist at the World Bank, said that organizations such as the Ford Foundation have played an important role in the development of India for decades. It should be of concern that NGOs are being subjected to conditions that make it difficult for them to function, he added.
Stiglitz also said the arrest of JNU Students Union president Kanhaiya Kumar on sedition charges was a matter of concern for the international community.
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Kumar was arrested on 12 February on sedition charges for allegedly raising “anti-national" slogans in support of Parliament attack convict Afzal Guru at an event held on the JNU campus to commemorate Guru’s execution.
“There is a spotlight on what is going on in India and when there is that kind of closing down action in any university, it puts you in a small group of countries... Turkey is the other country that is in the small group. And most of those countries are authoritarian in nature and one should know that that kind of thing can have very negative effects on foreign investors," cautioned Stiglitz.
He said the strong views taken by the international community about these events in India could be right or wrong. “If those (judgments) are wrong, India should do better job of explaining it," he said.
For tackling inequality in the country, he said the government should make sure that the economy grows at a rapid rate and not get “overly obsessed" about inflation.
“Excessive focus on inflation almost inevitability leads to higher unemployment levels and lower growth and therefore more inequality," Stiglitz said.
This is in sharp contrast to the approach of the outgoing Reserve Bank of India (RBI) governor Raghuram Rajan, who has long argued that inflation has to be subdued for India to achieve sustainable long-term growth.
In February 2015, RBI and the government signed a new monetary policy framework agreement which laid down a target to bring down inflation to 4% (+/- 2%) in the medium term.