As NITI vice-chairperson, Suman Bery will now be expected to guide policy

Suman Bery will bring with him his rich experience with reputed institutions such as the World Bank, the Reserve Bank of India (RBI), the National Council of Applied Economic Research (NCAER), International Growth Centre, Bruegel as well as with private companies such as Shell to NITI Aayog, which is expected to guide official policies in an economic environment where India Inc will play a larger role than before.

Bery will replace incumbent Rajiv Kumar as Niti Aayog vice-chairperson from the next month at a time when various expert bodies including the monetary policy committee of the RBI have cut their projections for economic growth and raised those for the retail price inflation rate for the current financial year.

At a time when India was opening up, Berry took leave from the World Bank and worked as a special consultant to the RBI during 1992-94. That time, he advised the RBI governor and deputy governors on financial sector policy, institutional reform, and market development and regulation, an experience that would come as handy for him even as the central bank is now approaching new areas such as how to regulate crypto currencies.

As the world faces uncertainty due to the Russia-Ukraine war and the resultant ballooning of commodity prices, India will have to engage with different countries, often at war with each other, to serve its own interests. Not long ago, Bery wrote — “India’s economic diplomacy must also comprehend multilateralism, an arena where it has expertise but has traditionally been shy. As the discussion on the WTO has already indicated, for now the world has moved on from multilateral institutions to engagement occurring bilaterally among sovereigns. As noted, India has long had a seat at the top table. As 2022 approaches, we will need to decide what to order from the menu.” This advice may guide India’s economic diplomacy.

As India plans to privatise two public sector banks, Bery’s observation , though in a different context, provides a key insight — in the Indian case, the liabilities of the public sector banks are in effect entirely guaranteed by the central government. As such, they present a huge potential fiscal risk, one which India does not have the fiscal space to accommodate.

On the other hand, statutory portfolio requirements of a range of institutions, from commercial banks to provident funds, provide a captive market for government debt. The absence of active trading across the maturity spectrum of government debt inhibits the emergence of a true market-determined yield curve, he wrote on another occasion when the debt management office (DMO) was being set up in the finance ministry.

The management of the government debt has not entirely been shifted to this office. It would be interesting to see what Berry has to say on this as Niti’s vice-chairperson.

Those who have worked with Bery in NCAER (from 2001 to 2011) say that he laid focus on interactions with foreign researchers at that time. This resulted in bringing out a new publication — India Policy Forum, a joint initiative of NCAER and the Brookings Institution. It aims to nurture a global network of scholars interested in India’s economic transformation.

This kind of research may also help NITI in its advisory role to the government.

Bery will be the third academician to work as NITI V-C in over 7 years of its existence. This was quite in contrast to the erstwhile Planning Commission, at least during the United Progressive Alliance (UPA) ten-year stint when Montek Singh Ahluwalia was at the helm of affairs for the entire duration.

Suman Bery’s work profile:

1972-2000: Lead Economist at the World Bank

In between — 1992-94: Special consultant to RBI

2001-2011: Director-General at the National Council of Applied Economic Research

2012-2016: Chief economist at Shell

Since 2016

Non-resident fellow at Bruegel, an European economic think-tank

Columnist in various dailies, including Business Standard

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