THIRUVANANTHPAURAM: Chief Minister Pinarayi Vijayan seems to have made yet another perplexing choice of adviser, this time his financial adviser. Gita Gopinath is one of the brightest stars in the field of global macroeconomics, her radical ‘fiscal devaluation’ strategy had helped European countries like France to turn the corner, she is also the first tenured Indian economics professor in Harvard after Amartya Sen. However, the problem is, Ms Gopinath stands for everything that is sacrilege to the Left.
Ms Gopinath has been consistently egging the Modi government to go for Big Bang reforms. She wants greater ease for doing business, even preferring change of laws to fast-track environmental clearances. She wants to monetise loss-making PSUs. She roots for a spending cap on MGNREGS and fertiliser subsidies. She is pro-rich, argues for low corporate taxes. She is unhappy with the current level of privatisation in the health and education sectors. In short, she is a neo-liberal, a species the Left loves to spurn.
The timing of the appointment could be felt as a jolt; economy watchers feel that it could unsettle the fiscal measures confidently set in motion by finance minster Dr Thomas Isaac. The finance minister’s unconventional ploy to attract private funds has been received with crossed fingers. He himself has called it “tight-rope walking”.
“It looks like the Chief Minister has suddenly developed some misgivings about Dr Isaac’s strategy or why else would he pick an economic adviser when he has a finance minister with a sterling track record,” a top economist said. Government sources, however, said that Ms Gopinath would not interfere in the running of state finances.
“Her role will be of a macroeconomic nature,” a top finance department official said. “She will be used to tactically reposition the state, for instance, in terms of free trade arrangements that has been consistently harming the state’s agriculture sector. She can also be a valuable ally in the state's attempt to absorb the remittance shock that now looks inevitable,” the official said
Even top CPM circles insist that Mr Pinaryi’s move is not extraordinary. “During V.S. Achuthanandan’s tenure we had a WTO cell, helmed by far lesser people, but highly qualified nonetheless, to offer advice to the Chief Minister on ways to negotiate the state’s way through the labyrinth of free trade regimes,” a leader said.