Prof. Raj Kishore Panda in Bhubaneswar, March 17, 2022: Prof. Arvind Panagariya’s erudite article titled ‘Time for Good Economics’ dated March 12, 2022 in the Times of India has raised interest to discuss the topic a little further in the light of the link noticed between politics and economics in the country over the years.

No doubt, Prof. Panagariya is justified in arguing for long-term structural economic reforms at this hour when the present Modi Government at the centre is in a strong position with a huge majority in Parliament and Bharatiya Janata Party (BJP) ruling in a majority of states. In addition, the outcome of recent election in the four major states – voters re-electing the incumbent party, is a clear indication that the Prime Minister, Modi, enjoys overwhelming popularity among the people in the country and as such provides strong support to the argument of Prof. Panagariya for initiating long-term plans including structural changes for overhauling and improving the state of the Indian economy.

However, there is an old truism that good economics does not make good politics. This statement thus signifies that politicians and economist cannot live more symbiotically. Why this happens? As the argument goes, these two groups employ different forms of logic to approach a particular issue and use different time horizons in achieving the results.

Based on intellectualism gained through years of education the economists rely on deductive logic to argue while the politicians rely on political logic. Stating an example we may say that an economy characterized as full employment economy does not need fiscal stimulus, argues an economist. However the political logic is people love to see tax cut and hence political party in power will go for tax cut because it satisfies some social groups. And as we know it is the political logic that rules the policy roost.

Secondly, on the use of time horizon the politicians and economists differ. Since the politicians are very much concerned in getting elected or re-elected and there is regular search for votes, they are found to be interested in short-run results as compared to the economists whose time horizons are too long. While the politicians look ahead only to the next election the economists look for long-term time period. In the present technology dominated world the politicians look into the next newscasts or even to the next tweet to take decisions.

Coming to the Indian context, we find not many changes have taken place in the relationship between growth and electoral performance over the last seventy years. No consistent trend is noticed in the governments’ economic performance determining their fate in terms of voted back to power.

History shows that the Indian voters are fickle in throwing incumbent governments out of power in spite of its good economic performance. Studies show that leaving aside the initial years of independence when the tendency to vote out incumbent governments was low, it rose during 1970s to 1990s and reached its peak in the 1990s after which it is seen declining.

In view of the mixed trends noticed between the voters’ reward and the governments delivering better growth , Prof. Panagariya’s scholarly article suggesting Modi government to go ahead with long-term structural reforms seems to have less takers at the political decision making level.

We have seen recently the Central Government repealing the three Farm Laws apprehending unfavourable outcome in the assembly elections just concluded in five states. Though those farm laws were highly acclaimed by almost all economists in the country as progressive laws they could not stand the test of the time. We also see that various reform legislations adopted by the Parliament take long years to be implemented.

All these suggest that even after seventy-five years of independence India needs political leaders with good intention and vision for implement policies in the long term interest of the country.