The Reserve Bank is one governor short this week. Deputy governor Rakesh Mohan is heading out to Stanford University as Distinguished Consulting Professor, taking a break from his long stint in public policy to return to academia. But, it is not only RBI which will miss him.
Over the past few years, the top layer of economic policy-making in India has seen the entry of a large number of engineers, with many of them having graduated from the prestigious Indian Institute of Technology. Look around. Rakesh Mohan obtained his Bachelor of Science in electrical engineering from the Imperial College of Science and Technology, London. Then, there’s the man who is increasingly driving changes in the micro-structure of the financial markets and the macro-design of the financial system – Raghuram Rajan, former chief economist with International Monetary Fund and currently a professor with University of Chicago. He is an alumnus from IIT. Even current RBI governor Duvvuri Subbarao is an IIT graduate, though he majored in physics (Bsc from IIT Kharagpur & MSc from IIT Kanpur).
In the immediate vicinity outside the policy-making circle is a bunch of advisers and critics who play a very important role. One of them is Ajay Shah, who has also served as officer-on-special-duty with the finance ministry. He graduated from IIT Bombay as an aeronautical engineer. Ajit Ranade, chief economist with the A V Birla Group (apart from being a columnist with Mumbai Mirror), is also a graduate from IIT Bombay.
Most of them then went on to study economics at the post-grad and doctoral level. That raises two questions. First: Do engineers bring some special insight into economic thinking and policy-making? Second: why are so many engineers keen to jettison their first choice of academics and move to economics? Insights anybody?