7/30/2019 RAJA CHELLAIHA
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Raja Jesudoss Chelliah, arenowned economist,the doyen among
Indi-an public finance schol-ars, the architect of tax
reforms in the country is no more.He passed away on April 7, in
Chen-nai after a brief period of illness.With his passing away, we
have losta peer, a scholar of eminence, a pas-sionate reformer, an
institutional
builder and, above all, a genial hu-man being. The National
Instituteof Public Finance and Policy(NIPFP) has lost its founder
andmany in the institute feel a personalloss. There is hardly
anyone inthe country today who has done somuch for the cause of
public financeteaching, research and reform andhis passing away
truly marks endof an era.
After graduating from the Uni-versity of Pittsburgh, Dr Chell
iahwas in the National Council of Ap-plied Economics Research
(NCAER)for a short period where he workedon economic and functional
clas-sification of the budgets. He thenmoved on to the Rajasthan
and Os-mania universities, before joiningthe International Monetary
Fund(IMF) where he rose to become theChief of the Fiscal Analysis
Divi-sion in the Fiscal Affairs Depart-ment of the Fund. Convinced
thatthere is much to be done back in In-dia to redesign the
architecture, en-gineering and management aspectsof fiscal policy,
at the behest of thethen Finance Minister C Subra-manian, Dr
Chelliah returned to In-
dia and started the NIPFP as a thinktank to work closely with
the Min-istry of Finance, while remainingautonomous. The institute
was start-ed in a small room in the PlanningCommission in 1976 with
Dr PulinNayak being one of the earliest re-cruits. The strong
foundation helaid and the tradition of policy re-search he
established, has contin-ued to shape the institution as a pre-mier
think tank on fiscal policy. Con-cerned about the quality of
teach-ing and research in the universitiesin the southern part of
the country,he started the Madras School ofEconomics, and nursed it
from in-fancy to maturity. Very few peo-ple will have the stamina
andcourage to start an institution afterthe age of 70, but Dr
Chelliah wasdifferent. He successfully nursed itas a rare
institution of excellencein teaching, particularly in areassuch as
environmental economics,financial economics and
actuarialeconomics.
Dr Raja Chelliah belonged to therare breed of economists in
thecountry who made tremendous con-
tribution to applied research in pub-lic finance and provided
strong an-alytical underpinning for fiscal pol-icy calibration.
From his seminalwork onFiscal Policy in Underde-ve loped C ou
n-tries in 1960, inwh ich he ex -pounded thefundamentalproblems of
cal-ibrating fiscalpolicy in under-developed coun-tries, he went
onto do researchon a variety ofissues ranging from the profoundto
the utterly practical. The abovebook is still a classic and is
widely-used as a learning tool by studentsand policymakers alike
all over thedeveloping world. In a carrier span-ning almost 60
years, Dr Chelliahundertook his research on theo-retical and policy
issues on subjectssuch as concept of budget deficit,tax policy and
reforms, allocative
and technical efficiency in publicspending, sustainability of
publicdebt in India and intergovernmen-tal finance. His focus was
not con-fined to fiscal policy issues alone;
he put togetheran importantbook onIncome,Poverty and Be-yond ,
and waspresently en-gaged in com-pleting a studyon regional
eq-uity.
Perhaps, noother economist
in India has made as much con-tribution to the fiscal policy
debateas Dr Chelliah has. His contribu-tion to the design and
implemen-tation of tax reforms in India is par-ticularly notable.
He was the mainarchitect of the tax reforms pro-gramme when the
Government ofIndia embarked on economic re-forms in 1991. In fact,
the Tax Re-forms Committee (TRC) and the
Commission on Financial SectorReforms (chaired by
Narasimham)were the first two commissions setup when the economic
reform pro-gramme was initiated by the thenFinance Minister
Manmohan Singh.Dr Chelliah served as member andchairman of several
committees andcommissions appointed by the Gov-ernment of India and
various stategovernments. He was a member of
the Economic Administration Re-forms Commission, Indirect
Tax-ation Enquiry Committee, PlanningCommission, Ninth Finance
Com-mission and Fiscal Adviser to theFinance Minister. As a
Chairman ofthe TRC, Dr Chelliah prepared theblueprint for tax
reforms for thecountry, and it goes to the credit ofManmohan Singh
that he appoint-ed Dr Chelliah as fiscal advisor tothe finance
minister to implementthe recommendations. His sphereof policy
influence was not confinedto India alone. He was appointed asthe
chairman of the Tax ReformsCommission in Zimbabwe (1984-85) and was
called upon to advisethe Financial and Fiscal Commis-sion in South
Africa. He undertookone of the earliest studies on fiscaldevolution
in Sri Lanka as well.
Dr Chelliah was not merely apolicymaker, but also an
acade-mician of great standing. His basicstudy onFiscal Policy in
Under-developed Countries is, perhaps,the most profound
contribution deal-ing with the problems of fiscal pol-icy
formulation in developing coun-tries. The conceptual work he
car-
ried out at the IMF on alternativeconcepts of budget deficits
providesrare insights into the dynamics ofdebt, deficits and
economic growth.His study on trends in taxation indeveloping
countries is one of themost widely-referred articles in pub-lic
finance. He laid enormous im-portance not merely to what waswritten
but also to how it was writ-ten. The focus always was
com-municating to the common man,and generations of public
financescholars have learnt this art fromhim. For me, he was always
ateacher and an adviser and I hadthe distinction of co-authoring
abook with him on Trends and Issuesin Indian Federal Finance (1981)
inearly part of my carrier and wealso published the Survey of
Re-search in Indian Fiscal Federal -ism (1996) for the Indian
Councilof Social Science Resea rch. We,at NIPFP, will surely miss
his guid-ance, and the public finance schol-ars in the country will
miss a schol-ar and a critique.
The author is director, NIPFP
Raja Chelliah: Fatherof Indias tax reforms
Hell be remembered for conceptualising and implementing Indias
tax reforms, even
as his early books on fiscal policy are still widely referred
to, says M Govinda Rao
Few people have thecourage to start somethingnew when theyre 70
years
old, but thats whatChelliah did when he set up
the Madras Schoolof Economics
PORTRAIT: BINAY SINHA
