TIOL - COB( WEB) - 940
OCTOBER 3, 2024

By Shailendra Kumar, Founder Editor

WE had ebulliently set the stage for the 5th Edition of the TIOL Fiscal Awards 2024, which comprises of TIOL Kautilya Global Award for Lifetime contribution to Economics and Policy-making, and TIOL Fiscal Heritage Award for Lifetime contribution to Economic and Fiscal Space in India. Like every year, we have high expectations of an intellectually and fiscally rich shindig with good vibes. But what eventually turned out to be was more extraordinary and mesmerising - simply 'intaxicating' and beyond all possible cravings for fiscal perspicuity! It came out as a subliminal Sangam (confluence) of high-octane fiscal and monetary thoughts which every economy desperately needs to balance for steady economic growth along with financial stability in the economy. And it became a reality only because we had three legends of diverse experiences and their folklores of success stories range from fiscal economics, monetary economics, financial economics, labour economics to macroeconomics which pour into the making of a stable and high growth trajectory economy. This is what India has diligently been trying to achieve in the past decades.

The three legends who sat shoulder-to-shoulder on the dais were the former US Treasury Secretary, Mr Larry Summers, the former RBI Governor, Dr C Rangarajan and Dr Y V Reddy, also a former RBI Governor. Another seasoned and globally-acclaimed economist, Mr N K Singh, also graced the occasion and sat in the front row on sofa. Incidentally, Dr Rangarajan and Dr Reddy were also Chairpersons of the Finance Commissions in the past and when they met Mr N K Singh, it was a rare toothsome moment for the threesome - Chairpersons of the Finance Commissions (see pic).

After the Kautilya Global Award was conferred on Mr Larry Summers by the Deputy Chairman of the Rajya Sabha, Mr Harivansh Narayan Singh, Mr Larry delivered his Award Acceptance Speech extempore with customary elegance and felicity. It began with a trek down the memory lane. He recalled the beginning of his career as the Chief Economist for the World Bank in 1991 when India had deployed the best crop of its diplomats known for their polished persuasive skills. And the goal was to earn sanction of a loan of about USD two billion. Then comes, he gleefully uttered, the end of his active policy-making career when India is a nation of over USD 600 billion forex reserves. He also observed that he worked closely with Mr N K Singh during India's G20 Presidency on a project which was to lay the roadmap for the reform of the multilateral development banks like WB and IMF. What an amazing transformation of a nation, he wowed! He said that the profound progress India has made over the decades, indeed calls for celebration.

Why did he choose to pursue a career in economics? Mr Summers said that unlike a doctor who can treat patients only in thousands in his lifetime, an economist with his innovative and creative thoughts can make a difference in the life of millions of people. Policies designed by an economist can improve the stagnating living standards of people to a rapidly-growing standards. While talking about taxation, he recalled the oft-quoted universal truth - Taxes are the price we pay for civilisation, but designing a tax system is a very complex exercise. What builds pressure on taxpayers in a country are the factors like social insurance, care for the aged and the poor and rising income inequality. Such pressure is going to pile up on the governments in the future which will have to redesign their tax systems. He further observed that the rise of digital world means more data and more records and hence, greater capacity for the treasury to levy and collect more taxes. This is where the work for tax professionals is going to be increasingly more important in the years ahead. He ended his speech by emphasising that he is humbled by the TIOL Jury's decision to confer the Kautilya Global Award on him.

While warmly congratulating Mr Larry Summers on the conferment of the Global Award, the recipient of the TIOL Fiscal Heritage Award, Dr C Rangarajan, said that his friendship with Mr Larry goes back to his days in the University of Pennsylvania where he studied under Mr Larry's father Prof Bob Summers. Being a monetary economist, Dr Rangarajan observed that there is a close nexus between monetary and fiscal policies and the point where they intersect each other is the public borrowing. When governments want to borrow more than what the markets want to absorb, part of the burden falls on the lap of monetary authorities leading to excessive creation of reserve money with its consequential impact on inflation. He recalled that the passing of the FRBM Act, 2003 was a step in the right direction. And it was a wise step to limit fiscal deficit of the Centre and the States combined together at 6%. He emphasised that for sustained growth, stability is very much needed along with growth. To realise stability goal, some rules are needed. He said that there cannot be a case of Rules vs Discretion. What is more desirable is rules with discretion and both monetary and fiscal managers need to keep this in mind.

In his acceptance speech, Dr Y V Reddy who is credited to have first coined the term 'financial inclusion' in 2005, preferred to acknowledge the contributions of the 'foot soldiers' of public policy. By 'foot soldiers', he meant drivers who always arrive on time, the cleaning staff who keep the offices ready every day, and many others like them. He proudly said: "In a way, this honour is for all of these people without whom our system would not function". Indeed, a great lesson for corporate honchos and senior functionaries in the government who need to be more humane and friendly to their foot soldiers and treat them as an indispensable slice of their core team. Talking about the real meaning of work for his generation, he said that his generation was privileged to be placed in the unique moment in history. How? "We were aware that we were not just working for a living, but were helping an infant nation, born against all odds out of the heady victory of independence and the aftermath of partition, to find its feet and grow wings. Many of us felt a great debt to the leaders who struggled and sacrificed for independence. We believed that the work we were doing would lay the societal, economic, and political foundations for the future of India."

The contributions made by all the three legends were profusely lauded by Mr Harivansh Narayan Singh and Justice A K Patnaik. While addressing the august gathering, Justice Shiva Kirti Singh, the Chairman of the Jury Panel, explained the transparent process of naming recipients of the much-coveted TIOL Fiscal Awards every year. The first leg of the event ended on a high note, which was laudably sustained by the speakers who joined the subsequent sessions of TIOL Tax Congress, the Book Launch and the TIOL National Taxation Awards 2024, which was attended by Mr Harivansh Narayan Singh; Dr P Thiaga Rajan, the Minister for IT and Digital Services, Government of Tamil Nadu and the former Member of Parliament, Mr K C Tyagi. I will bring in-depth insights of the Tax Congress in the coming weeks.