Isher Judge Ahluwalia : An Economist and Institution-Builder

 

Isher J Ahluwalia, a noted economist who walked into the male-dominated world of Public Policy Research and Economic Policy and created a distinct identity for herself as the builder of ICRIER, an eminent think tank body, died on September 26, 2020 after a 10-month-long battle with brain cancer.

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Isher Judge Ahluwalia—hailing from a modest family of 11 children with a family business of pickle making that was not doing all that good obtained her Bachelor’s degree (Economics Hons.) from Presidency College, Kolkata; Masters from Delhi School of Economics and Ph.D. from Massachusetts Institute of Technology in Economics working on the topic, “A Macro-Economic Model of the Indian Economy Analysing Inflation During 1951-1973” under the supervision of Dr Stanley Fisher in 1976—led an outstanding life with an inquisitive mind and unflagging thrust for growth and knowledge to become one of the leading policy economists of contemporary India.

She started her career as a policy economist at the International Monetary Fund, Washington DC and then moved over to India in 1979 along with her husband, Montek Singh Ahluwalia, who was then selected as Economic Adviser in the Finance Ministry. It was not to her liking to join either a government service or a university, for none of them, according to her, offer flexibility and facilities needed to pursue research interests. Indeed, she was highly critical of the way in which economics is being taught in Indian universities. Her grouse was that despite there being eminent faculty, students were “not encouraged to apply economic theory to issues of economic policy that were of contemporary interest.”  Thus, joining the Centre for Policy Research (CPR) as professor, she worked on industrial growth and manufacturing productivity, besides writing two books: Industrial Growth in India: Stagnation since the Mid-Sixties (1989, Oxford University Press) and Productivity and Growth in Indian Manufacturing (1991, Oxford University Press), which are considered as her seminal contributions to the literature. As the current head of CPR, Yamini Aiyar tweeted, “She was the first female scholar at CPR in the 1980s” paving the way for the succeeding generations of women. 

She had empirically demonstrated beyond doubt in her first book, Industrial Growth in India: Stagnation since the Mid-Sixties, that the post-independent policy regime of highly restrictive controls on private investment and unrestricted protection of inefficient enterprises that the government adopted had led to stagnation in total factor productivity, which in turn resulted in stagnation of Indian industry. Indeed, she was more forthright in her second book, Productivity and Growth in Indian Manufacturing, wherein she stated that the industrial licensing system that was “... the principal instrument for channelling investments in the industrial sector in ‘socially desired directions’”, had “controlled not only entry into an industry and expansion of capacity, but also technology, output mix, capacity location and import content” and “enforced barriers to exit and employee redundancy, favored smaller enterprises and regional dispersion”, and in course of time “had become more and more regulatory and less and less developmental, thus belying the promise of ‘channelling’ growth in desired directions ...”

At the same time, she was also bold enough to say that starting in the early 80s, productivity growth in Indian manufacturing had turned around and that this had really to do with the change in the policy regime that had by then been liberalized. However, it is this research of her on the lack of economic productivity that made her a much-cited scholar. Similarly, her work on estimating the Solow residual for the Indian economy had been hotly debated for long on the selection of appropriate price deflator for arriving at the estimates of output and input in constant (real) prices.

Right from her early career, she was a staunch supporter of economic liberalization and in fact positioned herself along with her husband, Montek Singh Ahuliwalia, against the licence-quota-permit-raj. During the days of India’s balance of payments crisis in the early 90s, she was said to have played an advisory role from behind with great equanimity and rectitude. Indeed, very few outside power circles know about the significant contribution of her “congenital reform instincts” to the formulation and successful adoption of reform program that ultimately moved India away from Nehruvian planned economy to a liberalized economy.  

Later, moving to Indian Council for Research on International Economic Relations (ICRIER) she, assuming the role of Director and Chief Executive in 1998, gave a boost to the institute’s mission. It was during her tenure as Chairperson during 2005-2020 that ICRIER rose to be ranked as “India’s best think tank in international economic policy and international development”. Endowed with the qualities of excellence, integrity and independence and coupled with outstanding leadership and commitment, Isher Ahluwalia made ICRIER known “for the excellence of the quality of research, particularly in areas of agriculture, trade policy and telecom”. It is through her own research and the research programs of ICRIER, Isher Ahluwalia silently influenced the mindset of policy-makers in India to use theoretical knowledge and rigorous research in addressing contemporary policy challenges.

Ever since she was appointed as Chairperson of the High-Powered Expert Committee on Urban Infrastructure and Services during 2008-11, she developed active interest in researching on issues of urban economics and governance. Indeed, she made urbanization her own research-field and published two books: Urbanization in India – Challenges, Opportunities and the Way Forward (edited along with two others) and Transforming Our Cities: Postcards of Change. Her central argument about the need for planned urban growth rests on the principle that “investment climate is as much about ease of living in a location as about ease of doing business”, and hence stressed the urgent need to address problems of clean water, solid waste management, congestion, pollution, etc., for sustaining a high growth strategy. Quoting the likelihood of urban share of the GDP growing to 75% by 2030, she stressed the importance of government reducing the gap between private benefit and social costs to achieve fast and sustainable economic development.

Her fervent engagement with policy research continued till her last breath. As a distinguished economist, dedicated institution builder, passionate policy researcher, and author, her work spread across macroeconomics, public policy, urban infrastructure, and sustainable urbanization. In 2012, she, along with Dr IMD Little, published the revised edition of the book, India’s Economic Reforms and Development – Essays for Manmohan Singh and presented it to PM in a panel discussion that she arranged in Delhi on April 14, 2012. Interestingly, while inviting the first panelist to speak, she announced, “We have an agreement with Prime Minister that ‘he is here to listen and not to speak’”, which is a testimony to her honesty and passion for free and frank discussions so as to gain the benefit of acquiring right knowledge for framing and implementing right policy changes.

She served as Board Member (2000-06) and Chairperson of the Board of Trustees of the International Food Policy Research Institute from 2003 to 2006 and was instrumental in establishing IFRI’s South Asia Regional Office in New Delhi in 2005. She was awarded the Padma Bhushan by the President of India in the year 2009 for her services in the field of education and literature.

The last book that she wrote lying in bed battling cancer was, Breaking Through: A Memoir. Even during this grim battle with cancer, her sense of humor that was suffused with a subtle romance is evident when she thanked her husband for his support in writing the book thus: “As my health weakened, he would take dictation, type out the chapters, sit and read them out to me, write out my corrections in hand, and work them into typed version. He is certainly the highest qualified Research Assistant that I could hope for…” 

Isher J Ahuliwalia’s life is a testimony to the extraordinary heights that a woman can reach on one’s own merit and hard work while keeping one’s feet firmly planted on the ground.