India is an unusual developing economy for several reasons one of which is that unlike most other such economies, for many decades now India has been blessed with enormously capable minds when it comes to economic policymaking. For those who have had the privilege of having seen brilliant minds like Amiya Kumar Dasgupta or IG Patel at work, the debt that India owes to these exceptional intellects would be obvious. For the rest of us, the team at Azim Premji University has rendered yeoman service to the nation by sponsoring the efforts of a group of talented young economists to provide short biographies of India’s greatest economists. In many ways, these 30 great economists are the women & men who have shaped modern India.
Whilst we would strongly encourage you to visit the Premji University website and read these 30 profiles, here are two profiles that we felt were so exceptional that if you don’t read them, you will miss out on understanding an essential aspect of change in independent India.
Our friend Pramit Bhattacharya has written the profile on PC Mahalanobis, arguably the single most important intellectual in the first 20 years of India’s independence. Mahalanobis built the Indian Statistical Institutes (ISI) and in the decades after his death, the ISI became one of the leading places in the world for statistical research. Most of the macroeconomic statistics that we take for granted these days owe their birth to Mahalanobis.
Pramit writes: “With the blessings of India’s first Prime Minister Jawaharlal Nehru and then finance minister C.D. Deshmukh, Mahalanobis assembled a team of global and local researchers at the Indian Statistical Institute (ISI) to provide greater rigour and empirical ballast to India’s five-year development plans.
The Perspective Planning Division set up by Mahalanobis at the Planning Commission and the Planning Unit at ISI acquainted a new generation of economists and economic statisticians with the art and science of model-building. Some of the leading Indian economists of the post-independence period — Ashok Rudra, A. Vaidyanathan, B.S. Minhas, Jagdish Bhagwati, Pranab Bardhan, and T.N. Srinivasan — were initiated into the world of policymaking by Mahalanobis and his close associate Pitambar Pant.
The revamp of India’s statistical system after independence owes much to the efforts of ‘the Professor’, as he came to be known in government and academic circles. Mahalanobis and his colleagues built the major economic datasets that we take for granted today – the national accounts series, the National Sample Survey (NSS), and the Annual Survey of Industries (ASI).
It was their ability to come up with ingenious solutions to practical policy problems that placed ISI statisticians at the heart of policymaking in newly independent India…
In 1933, ISI launched the first Indian journal on statistics. It was called Sankhya, evoking India’s ancient heritage of empirical thought7. Several path-breaking statistical and economic investigations were published in Sankhya in the years that followed…
The results of some of the early socioeconomic surveys conducted by the leading Indian economist D.R. Gadgil were also published in Sankhya. “No statistical journal has surpassed it in excellence and scope of content,” the renowned American statistician W. E. Deming declared (1972, pp. 49 – 50) in 1972, when Mahalanobis passed away.
By the 1940s, both Mahalanobis and his institute had established a global reputation as statistical powerhouses. Mahalanobis was the lone Asian voice at the nuclear session of the United Nations Statistical Commission (UNSC), held in New York in 1946. He argued that large-scale sample surveys would become an invaluable resource for developing countries that lacked rich administrative datasets. Hence, it was important to frame global rules for conducting such surveys. Mahalanobis’ suggestion was accepted and he was asked to chair the first UNSC sub-committee on sampling.
The global manual on sampling prepared by Mahalanobis…became part of the global survey toolkit. Statistical organisations in both rich and poor countries began using these tools to improve the accuracy of survey estimates.
In 1949, Nehru appointed Mahalanobis as the honorary statistical advisor to the Union cabinet and asked him to chair the National Income Committee. Nehru had spent long hours with Mahalanobis at Tagore’s residence on his visits to Calcutta…sought Mahalanobis’ help in revamping India’s statistical infrastructure.
The National Income Committee — which included the economists Gadgil and V.K.R.V. Rao — was asked to prepare India’s first national income estimates, and to lay down a roadmap for improving the accuracy of these estimates over time. Moni Mukherjee, an economic statistician from ISI, acted as the secretary to the committee. The committee’s report laid bare the weaknesses in India’s statistical edifice, and indicated how they could be addressed.
Mahalanobis took the lead in rebuilding the statistical system. The NSS project — initially run by statisticians at ISI — was his crowning accomplishment. In a statistically deprived economy, it helped furnish data on a vast range of subjects: from consumption expenditure to agricultural land-holdings. Over time, NSS data came to be used to track employment and poverty levels, and to monitor the performance of welfare schemes across the country.
Mahalanobis realised that it would take years to process the raw NSS data unless computers were deployed. Thanks to his persistent efforts, ISI was able to acquire the first digital computer in India in 1956…”
Shruti Rajagopalan and Shreyas Narla’s pen portrait of Padma Desai is a great read because it tells us that decades before India’s socialist economy imploded in the late 1980s, great Indian economists were highlighting the flaws in India’s economic construct. Padma was an exceptional mathematician and a great economist. Rajagopalan & Narla write: “In her doctoral thesis (partially published in the Review of Economics and Statistics in 1961), Desai adapted Leontief’s framework to the Indian system, constructing a short-term planning model that quantified intersectoral transfers based on data from Indian plans. Her model extended the input-output framework by incorporating household consumption patterns and integrating exogenous factors such as exports, capital formation, and government spending.
In her early inquiries, Desai challenged received knowledge on centralised coordination in India. She analysed W. Brian Reddaway’s model of India’s Third Five-Year Plan and noted how a static framework overlooked real-world constraints. By ignoring feedback loops, planners often set ambitious output targets without matching them to actual capacities. Later, in “Alternative Measures of Import Substitution,” she showed that different metrics for gauging import substitution could yield contradictory verdicts about the same industry — suggesting that protective barriers might mask inefficiencies rather than foster competitiveness. This article grew out of a broader research programme financed by the International Economics Workshop at Columbia University — where Desai was a research associate in early 1967 — and by the OECD Development Centre in Paris. Together, those grants supported the extended investigation that culminated in her collaboration with Jagdish Bhagwati, Planning for Industrialisation – A Study of Indian Industrialisation and Trade Policies since 1951.
The book dissected India’s industrial policy from 1951 to 1966, revealing a systemic flaw: planners fixated on setting rigid physical production targets — dictating how much each factory could produce — while lacking mechanisms to ensure industrial capacity could meet these goals. The result, they argued, was inefficiency and declining competitiveness — evident in the stagnation of India’s industrial growth by the late 1960s.
Bhagwati’s trade theory and Desai’s sector-level analysis further showed that import substitution produced high-cost domestic industries within protected markets. They advocated abolishing licensing in non-strategic sectors and adopting flexible exchange rates. The response to these ideas was, at best, lukewarm, and mostly deemed radical in the 1970s. But eventually, this book was foundational to India’s big-bang reforms in 1991.”
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