Kautilya, Newton, Homo Sapiens in Economic Survey

From Kautilya’s Arthshastra of 4th century BC to Kamandak’s Nitisara of 4th century AD, from Gandhian Talisman to Matasyanyaya (law of the jungle) and Homo Sapiens to Dwarfs versus Giants, the first economic survey of Modi 2:0 government made use of rich imageries to hammer home the understanding of complex financial fundamentals.

The economic survey with “blue sky thinking" (open-minded thinking) authored by Chief Economic adviser Krishnamurthy V Subramanian applied Abraham Lincoln’s famous line “Of the People, By the People, For the People” to highlight the significance of data being viewed as a public good and quoted Sir Isaac Newton to acknowledge the contribution of his predecessors in elevating the level of Economic Surveys.

The Survey, which made suggestions like ensuring that top tax payers could get diplomatic-type privileges and roads named after them, also suggested for monetization of data generated by the government “to ease the pressure on government finances”.

“Navigating in an uncertain, wobbly world requires constant monitoring of the path followed by the economy using real-time indicators. Thus, data can serve as the stones that enable one to cross the river,” a chapter in the survey said. It also used Chinese politician Deng Xiaoping’s quote “Cross the river by feeling the stones.”

Dwelling on the job creation front, the survey said the issue in India suffers policies that foster dwarfs - small firms that never grow. Playing the Dwarfs versus the Giants imagery, the economic survey called for reorienting policies for MSME Growth.

Making a strong pitch for filling up vacancies in the judiciary, the Survey called for “Ending Matsyanyaya” as it elaborated on how to ramp up capacity in the lower judiciary. Matsyanyaya means the law of the fish/jungle - the big fish eating up the smaller ones or the big animal eating up smaller ones.

Calling for leveraging the behavioural economics of “Nudge”, the survey pitched for “Policy for Homo Sapiens, Not Homo Economicus”, arguing that decisions made by real people often deviate from the impractical robots theorized in classical economics. It also drew on the psychology of human behaviour in the chapter on Swachh Bharat Mission (SBM) and the Beti Bachao Beti Padhao (BBBP).

In the preface, the CEA pointed out that well-known economist Adam Smith, in his book the ‘Theory of Moral Sentiment’ had noted that a wide range of human choices are driven and limited by our mental resources - cognitive ability, attention and motivation.

“Behavioural economics relies on this essential insight from human psychology, that real people do not always behave like robots, rational and unbiased individuals that form the basis of classical economic theory called “homo economicus”, he argued.