Opinion | A banker who combined the best of two schools of economic thinking

Subir and I crossed paths may times; not only in different, but vastly diverse roles. I first met him as an academic at the Indira Gandhi Institute for Development Research (IGIDR). Then we interacted as fellow columnists at the Business Standard. He “succeeded” me as the chief economist at Crisil. In 2002, I had accepted an offer as chief economist at Crisil, but never joined as I moved to Jammu and Kashmir as economic advisor. Ravi Mohan, who was the then CEO, asked me for a recommendation and I suggested Subir Gokarn. At that point, he was working with the National Council of Applied Economic Research and was my tenant in New Delhi!

A few year later, the earlier tenuous landlord-tenant relationship was replaced by a more stressful relationship: Regulator and market participant! In 2009, when he was appointed as the deputy governor of the Reserve Bank of India (RBI), I was doing my second term as the chairman of the J&K Bank! We met many times during that phase to discuss the all-important credit policy issues, which he was in charge of.

As an accomplished professional economist, Subir combined the best of two divergent and often conflicting schools of economic thinking and approach: The Mumbai and the Delhi school. He was one of the rare breed of economists who understood market’s needs and appreciated the government’s compulsions.

The Bombay school had influenced him to believe that democratisation of entrepreneurship was the key to economic growth in a Schumpeterian sense. Closer home, his objectives were that of a C.N. Vakil or P.R. Bramananada, while his methods were that of a Sukhamoy Chakravarty.

The Delhi school had sensitised him to the distributional virtues of public investment-led growth. He narrowed the policy differences by reasoning that analytically, it was only about capital goods versus consumer goods investment strategy. He was inclined towards the latter as it addressed the issue of inflation in the short and medium term. His view of an ideal mix would be high public expenditure with high private investment.

He was one person who knew that “borrowings” means different things in Delhi and Mumbai! As a ‘Mumbaikarnomist’ he understood fiscal deficit and spoke about it without prefixing a pejorative! And, he was one of the few Delhi economists who understood debt leverage!

This syncretic view of economic policy and management, of course, came from his academic education. He studied to be an economist at the St. Xaviers College in Mumbai and the Delhi School of Economics. It got well rounded and complete by his career moves. Even though it may not have been planned, the way it panned out was not just very complementary, but also quite complete. He got the academic grounding at IGIDR, a feel for micro-economics at Crisil, empirical and analytical rigour at the NCAER and a macro-monetary mastery at the country’s central bank.

His rise in public policy was quite remarkable. But unlike most who grow into their job, the remarkable thing about Subir was that he didn’t grow into any job. He somehow made the job fit him; tailor made it to be precise. I saw him as an associate professor at IGIDR, and he was the quintessential professor. And then, when I saw him at the RBI, it struck me that he was made for monetary policy management! The only other academic whom I know did the money manager job so well, was Dr C. Rangarajan.

This showed the versatility of his talent and the depth of his knowledge. He was a well-rounded macro economist, who understood fiscal policy, had a nuanced and insightful view of monetary policy, knew the bolts of industrial economics, and was thorough in trade matters.

Through all these high-profile jobs and many accomplishments, two things never changed: His unruly mop of hair and scruffy beard!

He will be missed; not only by his family, friends and fellow economists, but by the country. He could have contributed a lot more for quite some time more.

Haseeb Drabu is the former finance minister of Jammu and Kashmir.