'Many PhDs in economics opposed 1991 reforms': Montek Singh Ahluwalia on whether economists should run RBI
'I can think of many professional economists who could have been put in 1991, who would have been unmitigated disasters,' says Montek Singh Ahluwalia
- Jun 1, 2026,
- Updated Jun 1, 2026 1:25 PM IST
Former Planning Commission Deputy Chairman Montek Singh Ahluwalia has rejected the idea that the RBI needs a professional economist at the helm during times of economic uncertainty. He argued that academic credentials alone do not guarantee sound decision-making.
Speaking at The Indian Express Idea Exchange, Ahluwalia was asked whether, amid the current economic uncertainty triggered by the West Asia crisis and global trade tensions, India would benefit from having a professional economist in a key policymaking role, similar to the appointment of Raghuram Rajan in 2013.
"I don't share the view that by putting somebody called a professional economist in a particular job you improve the quality of decision making," Ahluwalia said. "I can think of many professional economists who could have been put in 1991, who would have been unmitigated disasters."
The 1991 economic reforms were carried out under Prime Minister PV Narasimha Rao's government, with Dr Manmohan Singh as Finance Minister. Singh, an eminent economist, later served as Prime Minister from 2004 to 2014. Singh also served as RBI Governor from September 1982 to January 1985.
"At that time, most of the professional economists would have been - certainly every one of my friends from the left who were very vocal - totally opposed to the economic reforms, and they all had PhDs in economics," Ahluwali said. "Never bother about the chap's degree."
Instead, Ahluwalia said the focus should be on the quality of decision-making. On that count, he credited the government for allowing the rupee to weaken. "So far I would give credit to the government for having let the rupee weaken," he said, arguing that India had earlier kept the currency "too strong."
Don't Miss: Crude was cheaper. Why didn't fuel prices drop? Economist Montek Singh explains
Ahluwalia said the current challenges facing India stem not only from domestic policy choices but also from a changing global environment, particularly uncertainty surrounding US trade policy.
"If the US introduces the kind of uncertainty that they have introduced on tariffs...I think we're facing very unusual circumstances and we should accept those," he said.
On trade, Ahluwalia welcomed India's push to sign free trade agreements (FTAs), while cautioning that their benefits would take time to materialise. "During that period, you must be very careful with lots of people saying that the FTA has done nothing, and exports have not grown. It will not show up for another three years if you ask me, but these are good things to do," he said.
He reiterated his long-held view that India missed an opportunity by staying out of the Regional Comprehensive Economic Partnership (RCEP), the Asia-Pacific trade bloc that includes China, Japan, South Korea, and ASEAN countries. "I would have preferred joining RCEP. We missed that opportunity," he said.
As an alternative, Ahluwalia suggested India should consider applying to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a major Asia-Pacific trade grouping that does not include China. "It could reassure countries like Japan, Korea, other countries in East Asia that India is now committed to following a more open policy," he said.
Former Planning Commission Deputy Chairman Montek Singh Ahluwalia has rejected the idea that the RBI needs a professional economist at the helm during times of economic uncertainty. He argued that academic credentials alone do not guarantee sound decision-making.
Speaking at The Indian Express Idea Exchange, Ahluwalia was asked whether, amid the current economic uncertainty triggered by the West Asia crisis and global trade tensions, India would benefit from having a professional economist in a key policymaking role, similar to the appointment of Raghuram Rajan in 2013.
"I don't share the view that by putting somebody called a professional economist in a particular job you improve the quality of decision making," Ahluwalia said. "I can think of many professional economists who could have been put in 1991, who would have been unmitigated disasters."
The 1991 economic reforms were carried out under Prime Minister PV Narasimha Rao's government, with Dr Manmohan Singh as Finance Minister. Singh, an eminent economist, later served as Prime Minister from 2004 to 2014. Singh also served as RBI Governor from September 1982 to January 1985.
"At that time, most of the professional economists would have been - certainly every one of my friends from the left who were very vocal - totally opposed to the economic reforms, and they all had PhDs in economics," Ahluwali said. "Never bother about the chap's degree."
Instead, Ahluwalia said the focus should be on the quality of decision-making. On that count, he credited the government for allowing the rupee to weaken. "So far I would give credit to the government for having let the rupee weaken," he said, arguing that India had earlier kept the currency "too strong."
Don't Miss: Crude was cheaper. Why didn't fuel prices drop? Economist Montek Singh explains
Ahluwalia said the current challenges facing India stem not only from domestic policy choices but also from a changing global environment, particularly uncertainty surrounding US trade policy.
"If the US introduces the kind of uncertainty that they have introduced on tariffs...I think we're facing very unusual circumstances and we should accept those," he said.
On trade, Ahluwalia welcomed India's push to sign free trade agreements (FTAs), while cautioning that their benefits would take time to materialise. "During that period, you must be very careful with lots of people saying that the FTA has done nothing, and exports have not grown. It will not show up for another three years if you ask me, but these are good things to do," he said.
He reiterated his long-held view that India missed an opportunity by staying out of the Regional Comprehensive Economic Partnership (RCEP), the Asia-Pacific trade bloc that includes China, Japan, South Korea, and ASEAN countries. "I would have preferred joining RCEP. We missed that opportunity," he said.
As an alternative, Ahluwalia suggested India should consider applying to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a major Asia-Pacific trade grouping that does not include China. "It could reassure countries like Japan, Korea, other countries in East Asia that India is now committed to following a more open policy," he said.