Economic Survey 2019 leans liberally on the wisdom of sages, scientists, and statesmen

There's more to literature than just sonnets. Scriptures are not just about abstract sermonising. Science is not limited only to laboratory trials. Complex human behaviour should not just be confined to the realms of practitioners of psychology. And why should questions about morality be restricted to academic philosophical discourses only?

From Upanishads to Charaka Samhita, from Kautilya to Mahatma Gandhi, from Deng Xiaoping to Adam Smith and John Maynard Keynes, Chief Economic Adviser Krishnamurthy V Subramanian dips deep into mankind's vast knowledge pool, seamlessly drawing examples from ancient wise men as well as contemporary thinkers to buttress modern economic arguments in his maiden Economic Survey.

Subramanian's efforts to pull from various disciplines is a carry forward of a now-established legacy that some of his predecessors, a point that he acknowledges at the very outset.

He forewords the Survey's 21 chapters spread in two volumes with a signed preface citing Sir Isaac Newton's immortal quote: "If I have seen further than others, it is by standing upon the shoulders of giants".

The Survey's cover is of a blue hue, which, according to the CEA, represents "blue sky thinking", adopts an "unfettered approach in thinking about the appropriate economic model for India".

Subramanian questions the mainstream economists' fixation to chase "equilibrium", arguing that it is about time to move beyond the traditional variables to achieve progress. In the chapter entitled "Shifting Gears: Private Investment as the Key Driver of Growth, Jobs, Exports and Demand", he quotes Friederich Von Hayek's, 1974 Nobel prize speech to reinforce the point. "If man is not to do more harm than good in his efforts to improve the social order, he will learn that in this, as in all other fields where essential complexity of an organized kind prevails, he cannot acquire the full knowledge which will make mastery of the events possible. He will therefore have to use what knowledge he can achieve, not to shape the results as the craftsman shapes his handiwork, but rather to cultivate a growth by providing the appropriate environment, in the manner in which the gardener does this for his plants."

The blueprint starts from the philosophy that economies are intricately interwoven systems. Therefore, they can neither be meaningfully viewed in silos nor can they be analysed without accounting for dynamic effects over time. Moreover, economies may rarely be in a state of equilibrium. The CEA makes a profound argument.

In another chapter on "Homo Economicus: Leveraging the Behavioural Economics of "Nudge"," he quotes the Mahabarata: "We cannot rely totally on rational thinking to gain information, as it is not without its bias".

Decisions made by real people often deviate from the impractical robots theorised in classical economics. Drawing on the psychology of human behaviour, behavioural economics provides insights to 'nudge' people towards desirable behaviour.

On a special box on "Tax evasion, wilful default, and the Doctrine of Pious Obligation," Subramanian, perhaps seeks to appeal to religio-moral conscience of tax dodgers, arguing that the repayment of debt in one's own life is prescribed as necessary by scriptures across religions.

"In Hinduism, non-payment of debts is a sin and also a crime. The scriptures ordain that if a person's debts are not paid and he dies in a state of indebtedness, his soul may have to face evil consequences.

Therefore, it is the duty of his children to save him from such evil consequences. This duty or obligation of a child to repay the debts of the deceased parent is rested upon a special doctrine, known as "The Doctrine of Pious Obligation".

Under Islam, Prophet Muhammad advocated –Allaahummainnia’oodhibika min al-ma'thamwa’lmaghram (O Allaah, I seek refuge with You from sin and heavy debt)." A person cannot enter Paradise until his debt was paid off. All of his wealth could be used to pay the debt and if it is insufficient then one or more heirs of the deceased could voluntarily pay for him.

The Bible says, "Let no debt remain outstanding except the continuing debt to love one another -Romans 13:8" and “The wicked borrows and does not repay, but the righteous shows mercy and gives -Psalm 37:21."

He takes recourse to mythology to lay out an ambitious agenda for social change: from Beti Bachao, Beti Padhao to BADLAV (Beti Aapki Dhan Lakshmi Aur Vijay Lakshmi); from Swachh Bharat to Sundar Bharat; from "Give it up" for the LPG subsidy to "Think about the Subsidy"; and from tax evasion to tax compliance.

Ardhanareshwar – a half male-half female representation of Lord Shiva, the prophetess Gargi, who questioned the origin of all existence in her Vedic hymns and the great Maitreyi, who rejected half her husband’s wealth in favour of spiritual knowledge, the philosophical conversations between sage Agasthya and his highly educated wife Lopamudra, Yashoda, Kaushalya, Gandhari, Janaki, Radha all find mention in the Survey.

"Since such positive mythological insights about gender equality are readily available and deeply understood in Indian society, these can be used as part of a revolutionary BADLAV programme," it says.

No discourse on economic thinking can be complete without drawing from the knowledge of Adam Smith. Sumbramanian is no exception when he quotes Smith, the father of modern economics, from his book the 'Theory of Moral Sentiment', who noted that a wide range of human choices are driven and limited by our mental resources i.e., cognitive ability, attention and motivation.

In the same vein, he cites Nobel Laureate Richard Thaler, the most celebrated practitioner of behaviourial economics who has been waging a war on Homo economicus, a mythical human specie who resides exclusively in the models of classical economic theory.

Throughout his long and distinguished career Thaler, borrowing from psychology, sociology, and human curiosity, has argued that human decisions from the mundane to the complex, from healthcare to sports, are influenced by emotion and irrationality.

Precisely the point Subramanian seeks to make in the Economic Survey. "Real people do not always behave like robots, rational and unbiased individuals that form the basis of classical economic theory called "homo economicus"".

In the same chapter, he quotes Nobel laureate Daniel Kahnemann, an Israeli-American psychologist and economist famous for his work on the psychology of judgment and decision-making, also acclaimed for mainstreaming the concept of "indifference curve" into standard microeconomic analyses.

The CEA also cites behaviourial economist Alain Samson's seminal 2014 paper: "A simple change that could help everyone drink less", in Psychology Today.

In another chapter on small enterprises titled "Nourishing Dwarfs to become Giants: Reorienting policies for MSME" Subramanian quotes the Vrihadaranyak Upanishad: "From the complete, the complete is born. From a seed, a mature tree is born". There is, however, a disclaimer, for the chapter's title.

"The term "dwarfs" for firms that remain small despite being old is contrasted to "infants" for firms that are small because they are young. This usage is purely for firms and has no correlation with such usage for individuals and is therefore not intended to harm any sensibilities, whatsoever".

Subramanian calls for a new approach to data collection, collation and processing in India to democractise the process. In the spirit of the Constitution of India, the chapter is fittingly titled "Data of the people, by the people, for the people,” and quotes former Chinese premier Deng Xiaoping: "Cross the river by feeling the stones."

The CEA takes refuge in Kautilya's wisdom several times, quoting liberally from "Arthashashtra". He quotes from Chapter XIX, 'The Duties of a King' in Book I, ‘Concerning Discipline’ on fiscal developments. “In the happiness of his subjects lies his happiness; in their welfare his welfare; whatever pleases himself he shall not consider as good, but whatever pleases his subjects he shall consider as good. Hence the king shall ever be active and discharge his duties; the root of wealth is activity, and of evil its reverse."

In another instance on prices and inflation leans on Kautilya. "The Superintendent of Commerce shall ascertain demand or absence of demand for, and rise or fall in the price of, various kinds of merchandise which may be the products either of land or of water and which may have been brought in either by land or by water path. He shall also ascertain the time suitable for their distribution, centralisation, purchase, and sale," quoted from Arthasástra, Chapter XVI, 'the Superintendent of Commerce,’ in Book II, 'The Duties of Government Superintendents.'

And yet again on building capacity in the lower judiciary, the CEA falls back on Kautilya's "The Rule of Law and maintenance of order is the science of governance".

The relationship between economic governance and the Rule of Law (Dandaniti) has been emphasised by Indian thinkers since ancient times. It is seen as the key to prosperity, and a bulwark against Matsyanyaya (i.e. law of the fish/jungle), the survey says in the chapter entitled: "Ending Matsyanyaya: How To Ramp Up Capacity In The Lower Judiciary."

In the same chapter the survey quotes Kamandak's Nitisara, a seminal 4th century AD treatise on political thought written during the Gupta dynasty: "No branch of knowledge and policy is of any avail if the Rule of Law is neglected".

In "From Swachh Bharat to Sundar Bharat via Swasth Bharat : An Analysis of the Swachh Bharat Mission", Subramanian fittingly quotes "The river having water polluted with soil and faeces, insects, snakes and rats and carrying rainwater will aggravate all doshas. Slimy, having insects, impure, full of leaves, moss and mud, having abnormal color and taste, viscous and foul smelling water is not wholesome," from the Charaka Samhita.

Inclusive growth through affordable, reliable and sustainable energy remains a key developmental challenge, something that the CEA pertinently quotes the Rig Veda to buttress: "Sun is the soul of all animate and inanimate".

There is a clear case for use of technology to deliver welfare schemes, NREGA clearly is a case in point. The survey drives home the point by citing Sanskrit Subhashitas: "Work gets accomplished by putting in effort, and certainly not by mere wishful thinking."