Remembering Deena Khatkhate, an economist, a friend, a mentor
Economist Deena Khatkhate, who passed away at the age of 92 on September 15 in Bethesda, Maryland, in the US, was an unusual man. By his own description, he was a ‘gadfly’. Early in his youth, he joined the Communist Party of India (CPI), but quickly discovered its internal contradictions and exited it before finishing college. As he grew older, his disillusionment with State control of the economy and his conviction for promarket reforms grew.Between Amartya Sen and Jagdish Bhagwati, he saw his thinking aligned with that of the latter. Oddly, however, it was Bhagwati who first discovered Deena as an author. As Bhagwati puts it, when doing his bachelor’s degree in Bombay, he greatly “profited” from Deena’s writings.
The two economists became good friends while still in Bombay, and maintained close contact after they moved to two different cities in the US. Phone calls between them grew particularly frequent after the passing away of two of Deena’s dearest friends, V V Bhatt and Anand Chandavarkar. Both had been his colleagues first at the Reserve Bank of India (RBI), and then at the Bretton Woods institutions.
Deena was among the earliest to see the damage that India’s excessive reliance on a generalist bureaucracy was doing to the economy. As early as 1964, he criticised the Congress government for succumbing to the myth that the members of the ‘steel frame’ were omniscient. He noted that convinced of their own ability, the latter had placed themselves in charge of such specialised entities as RBI and steel-manufacturing enterprises.
“The reliance on the old type of administration has done incalculable harm to rapid economic development as slow progress in almost every direction can be tracked down to lack of appropriate managerial ability,” he wrote.
Reform-Friendly
Deena abhorred specious arguments and was unsparing even if they came from his friends. When an eminent Indian economist wrote in a 2005 article that socialism, rather than free-market reforms, had yielded the most important structural change in India, and backed up that claim by comparing 3-4% growth under the licence-permit raj with less than 1% growth under the British, Deena was scathing in his critique of him.
Calling such a comparison “both fatuous and facetious”, he wrote that under the British, the entire policy regime was addressed to British rather than Indian interests. “Any policy, statist or otherwise, with India’s interests at the centre, would have achieved better results than under a colonial regime.”
Deena personally knew nearly every leading economist who had servedin the Government of India, beginning with I G Patel and ending with Arvind Subramanian. When Manmohan Singh took the reins of the finance ministry and visited Washington DC for the International Monetary Fund (IMF)-World Bank annual meetings in 1993, he personally invited Deena to prepare a roadmap for financial sector reforms.
Deena completed the report in just one month. But, sadly, confirming his long-standing misgivings about it, India’s bureaucracy ensured that the report never saw the light of day.
Deena wrote prolifically and on diverse subjects during his three careers — one at RBI, another at IMF, and yet another as an independent commentator. Alongside, he befriended and mentored many scholars who became his lifelong admirers. Many of my friends and students, including Pravin Krishna, Poonam Gupta, Devesh Roy, Prachi Mishra and Arvind Subramanian, as well as myself, benefited from his generosity.
In one case going back to the 1990s, a young economist came to work at RBI on deputation from the IMF. He felt lonely in the megacity that is Bombay. On top of that, he was struggling to publish papers in journals to advance his academic career. Under these trying circumstances came an unsolicited call from Deena from Washington DC offering a helping hand. He gave the young man numerous suggestions on one of his papers and saw to it that the paper appeared in a professional journal.
That young economist, Urjit Patel, went on to become RBI governor. The incident left such an indelible mark on Patel’s heart and soul that every time he visited Washington, including for biannual IMF-World Bank meetings in April and October, he made sure that he visited Deena.
I first met Deena almost 30 years ago during my four-year stint at the World Bank. I was 25 years his junior, but that did not matter. Over time, we became close friends. Amita, my wife, and I would frequently enjoy meals with Deena and his wife, Shanta. We invited each other at parties and went out together to restaurants.
Speak-Easy Economist
Deena gave us the gossip he knew, which was a lot, and picked from us what we knew, which was not very much. After we moved to New York, our visits to the Washington area rarely ended without a meal with Deena and Shanta.
Deena loved to talk. At parties, people would complain that he monopolised all of the time. But that was fine since, as a voracious reader, he was better informed than the rest.
As I travelled back to New York after bidding my final goodbye to Deena at his funeral, attended by more than 150 of his friends and admirers, I had an eerie feeling knowing that he would talk no more.
(The writer is professor, Columbia University)