One could just replace newspaper (in the quote above) with Barkha Dutt’s show We the People special from Jaipur Literature Festival featuring author of Capital in Twenty First Century -Thomas Piketty, Chief Economic Adviser Arvind Subramanian and NITI Ayog member Bibek Debroy and the statement would still hold. That the misinformation was coming from one of the eminent economist of the country and went unchallenged by the eminent journalist anchoring the show bothers us even more.

Full disclosure, we like Barkha Dutt and feel she can still bring nuance to complex discussions. Because this was a show anchored by her, it worries us more. Hence we are writing this review in spite of the fact that the show Modern Marx debates Team Modinomics was aired on 24^th January.

We love Thomas Piketty and his 200 years of empirical-data-backed illustration of inequality, but we feel his recommendations are thin and need more work, especially the global taxation regulation mechanism.

We also understand Arvind Subramanian and Bibek Debroy are establishment economists and hence there could be limits to their expressions. But we are not sure if being economical with facts on national TV is one of those limitations.

First the economics narrative of the show which was problematic at so many levels:

1. Actual public spending on health: Piketty said, India’s public expenditure for health was at 1.2% and could do much better like 3% of China or even like Sri Lanka, South Africa and Brazil, who were spending much more. Debroy brushed that off saying 1% was just federal allocation. If private out-of-pocket expenditure is added it was 4% to 5% and if state allocations were added it would be much more. Seriously? Private out-of-pocket expenditure is high because public allocation is so low. In fact private health expenditure burden is the second most important reason of rural indebtedness in India. And adding up federal and state level still just made it 1.2% as per the Human Development Report 2013 (which actually looked at all sources of public allocation). Such a misleading argument is not expected from an “eminent economist”.

2. On tax-GDP ratio: Piketty said it was 10% and Bibek Debroy schooled him that it was 18% in India (Centre for Budget and Governance Accountability’s Budget analysis for 2015-2016 vouches that). But Debroy was silent on Piketty’s point of taxing the super-rich/ruling elite (as Piketty addresses them) to raise resources for financing the social sector and addressing inequality. In all fairness being non committal on something like this is almost a given when you are serving the government in India. No change on this from pervious eminent economists.

3. On lack of transparency in income tax data: Piketty talked of the problem with non-transparency with income tax data and how the household surveys, dependent on self-reportage of income were seriously under-measuring inequality. Non-transparency of income data and public survey data was one of the central arguments of Piketty. Debroy countered that with mention of context and calling Piketty’s argument less significant than the real issue of state incapacity to deliver. Master-class in obfuscation. Prof R Vaidynathan of IIM Bangalore, an eminent name in finance and taxation had called out Mr Jaitley back in November 2014 on the secrecy around income tax data. Surely Prof Vaidyanathan knows the context of Indian economy and data-systems? And would state capacity be increased by starving them of funds and maintaining status quo on not taxing the super-rich properly?

4. On inheritance tax: Piketty finds it amusing that India has zero percent inheritance tax and yet it laments resource crunch. Inheritance tax was discontinued in India in 1985 (under Rajiv Gandhi regime) and both Subramanian and Debroy think it is a good thing. People who inherit have to belong to inter-generational rich families and some of them are super-elites from the British era. The fact that these people inherit wealth and do not create or earn wealth is good enough reason for taxing them, unless we are batting for the inter-generational rich and elite.

5. On better and more public spending in social sector: Debroy’s concern was if 6% goes to education (as is the global benchmark for developing countries), 4% for health, 10% for infrastructure then all of government revenues gets spent up. Does that mean government does nothing else? Thought experiment, so Debroy doesn’t want tax-GDP ratio raised and then he laments non-availability of resources for increasing allocation to health and education. Now that is a circuitous argument to defend low social spending. On a week when we got to know that public sector banks’ toxic loans amounting to 114,000 crore rupees has been written off in last three years with tax-payers’ money, may be increasing allocation to health and education and leaving nothing for bailing out rich debt defaulters and banksters is not such a bad idea!

6. On data transparency: Piketty kept questioning the rationale of having a 10 year old Right to Information legislation yet the secrecy around income tax data, survey data, Census unit level data and Socio Economic Caste Census (SECC) data (esp on caste). Debroy’s response on this point is gold standard for poker games. He brushed off the non-transparency first. Then said all of SECC data was released for rural India, then grudgingly accepted that caste data was being reconciled by the Arvind Panagariya team since OBC (Other Backward Caste) definition varies from state to state. Five years of reconciliation was Piketty’s counter-query which went unresponded. It is important to mention here that India has a dangerous tendency of using surveys as public relations pamphlets and constantly censoring inconvenient survey findings. In fact we are surprised at the lack of outrage from journalists on this avatar of increasing censorship. A detailed commentary published in NewsLaundry, earlier is here. Additionally, even the Surpeme Court has also ruled for disclosing the names of bank defaulters causing the Non Performing Asset (NPA) burden to public sector banks.

Additionally we also found reference to Piketty being a Western economist and unfamiliar with Indian context, a very weak defense. Because it was invoked to talk down Piketty or use it as a defense for current state of play in Indian economics. Both the strategies were wrong.

While our eminent economists were not factually incorrect, they definitely did their bit to mislead us.

Now for the journalistic problems with the show:

1. The show teasers kept telling us that Piketty, the Modern Marx is taking on the Modinomics heavy-weights. But Piketty spoke for about 20% time (yes we timed it!). Barkha did not moderate in a manner that Piketty could get proportionate talking time. And that was pitched as the USP of the show since we get to hear the other two often enough on Indian TV news shows. Unlike Indian TV debates where shouting and talking over each other is standard practice, Piketty was always waiting for his turn or for questions directed to him. Barkha should have known better and facilitated more since Debroy did use the age-old Indian argument style of repeating his earlier statement louder when being countered.

2. The fact-sheets on social sector spending, non-transparency on data is very easily available. Barkha’s research could have been more robust with basic fact sheets.

3. Barkha could have got another Left-wing/heterodox economist (who would not be accused of being Western or not knowing Indian context) too so the panel would have been more balanced. That would have meant getting away from that misleading title of the show too on Modern Marx…Modinomics etc.

But credit where it is due, Barkha did take on both our economists on Raghuram Rajan’s admonition of corporate debt defaulters who are partying lavishly.

Alas, the show could have been a real fact-based enlightening and engaging debate. Could have, and that is our angst.