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Photo: Hindustan Times
Photo: Hindustan Times

Opinion | A century of education at the Bombay School of Economics

The prestigious institute that’s entering its centenary year has given us eminent scholars and shaped Indian economic thought

The erstwhile Bombay School of Economics enters its centenary year this week. It began life on 1 August 1921, when C.N. Vakil was appointed as assistant professor of economics after his return from England. K.T. Shah joined as professor of economics in November. Economics teaching had begun earlier in cities such as Calcutta (1908), Madras (1916) and Allahabad (1916). Till then, Indian economists—including B.R. Ambedkar—had to go abroad for formal training in the discipline.

Economists trained in the Bombay School had a deep influence on Indian economic policy in the middle of the 20th century. J.J. Anjaria became the first chief economic adviser to the Indian government, and later a deputy governor of the Reserve Bank of India (RBI). V.K.R.V. Rao served in senior positions in the government, including membership of the council of ministers, and also set up three institutions—Delhi School of Economics, Institute of Economic Growth, and the Institute for Social and Economic Change. B.P. Adarkar dazzled John Maynard Keynes with his brilliance, and designed the first social security plan for India in 1944; Vallabhbhai Patel described him as “Chhota Beveridge", after William Beveridge, who laid the intellectual foundations of the British welfare state. R.K. Hazari wrote the influential study of industrial concentration in India, and his work led to later policies to curb monopolies.

The Indian central bank also benefitted from a steady stream of economists who either studied in the Bombay School or were part of the faculty—Nalini Ambegaonkar, Anand Chandavarkar, Deena Khatkhate, V.V. Bhatt, S.L. Shetty, A. Vasudevan, Kishori Udeshi and Narendra Jadhav, for instance. Many of them were profoundly involved in the key turning points in India monetary thinking. Successive generations of policymakers depended on the quiet wisdom of Vikas Chitre in matters of monetary economics.

Ashok Desai spent a few years on the School’s faculty after coming back from Cambridge, and was economic adviser to Manmohan Singh in the early days of the transition to a market economy. R.H. Patil, S.A. Dave, A. C. Shah, M. G. Bhide and P.G. Kakodkar led important financial sector institutions through the 1980s and 1990s.

The Bombay School put up a formidable challenge to the economic policy consensus in the early decades of India’s independence. The centrepiece of its dissent was the wage goods model that was offered as an alternative to the Mahalanobis model centred around capital goods. The Bombay School was generally in favour of a bigger role for markets within the framework of a mixed economy, argued in favour of increasing production of basic consumer goods as well as food, and was more sensitive to the inflationary consequences of deficit financing led by money creation. Meghnad Desai—another alumnus—once noted that India could have followed a different economic trajectory if the Bombay critique had been heard in New Delhi.

I joined the Bombay School of Economics at the very end of its golden era, under the leadership of Vakil, M.L. Dantwala, D.T. Lakdawala and P.R. Brahmananda. Vakil had presented the alternative wage goods model in collaboration with Brahmananda. Dantwala was one of the giants of agricultural economics, and the chairman of the first Agriculture Prices Commission. Lakdawala was deputy chairman of the Planning Commission and then headed the committee on poverty measurement that submitted its report in 1993. Brahmananda was the quintessential scholar, and the person most identified with the Bombay School way of thinking.

The training we students received was eclectic—from Milton Friedman to Michal Kalecki and from Robert Solow to Pierro Sraffa. The exposure to competing schools of thought, rather than a single dominant consensus, matters especially in the current times, now that convulsions in the global economy since 2008 have led to a revival of interest in economic thinking that goes beyond the dominant New Keynesian consensus.

The stalwarts gave the Bombay School its reputation. Two brilliant women continued to be remembered fondly—Krishna Bharadwaj and Kanta Ranadive. However, we students naturally gravitated towards a dazzling bunch of young professors who became friends as much as teachers, and especially the trio of M.J. Manohar Rao, Abhay Pethe and Ajit Karnik, who would discuss growth models and cricket scores with equal enthusiasm.

The Bombay School style of teaching was closer to the old British style than the modern American one. The main pedagogy was built around graphs rather than equations. One disadvantage was that the training we received was mathematically weaker than the training students got in competing centres such as the Delhi School of Economics. There were strong mathematicians in the department who taught quantitative courses. However, the main thrust of our education was quite light on mathematical techniques.

The Bombay School of Economics—now renamed as the Mumbai School of Economics and Public Policy—has in recent years lost ground to institutions such as the Delhi School of Economics and the Indira Gandhi Institute for Development Research. Newer private universities have also come on the scene. What matters, above all, is the cause of education in this vital subject. The learnings from the first 100 years should hopefully inform the challenging journey ahead.

Niranjan Rajadhyaksha is a member of the academic board of the Meghnad Desai Academy of Economics

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