Father of India's tax reforms

On the morning of February 20th, a good man passed away in Delhi. He may not have been famous. But he was well-known and greatly respected and loved amongst the community of public finance scholars and practitioners.

Above all, he was a gem of a human being. One in a million. Amaresh Bagchi finally succumbed to the blood cancer ailment he had so valiantly fought for the last twelve years.

Few knew of his ailment. He bore its tribulations with characteristic grace and stoicism. Understated and self-effacing as ever, this outstanding scholar-cum-public-servant continued to serve the cause of rational and humane public policy to his last day. His passing leaves a gaping void among the handful of top-notch public finance specialists who have served the country so well in the last few decades.

Born in Malda, Bengal in 1930, Amaresh-da (as he was widely known) lived a rather unusual life. After graduating from Presidency College, Kolkata, and acquiring a master's degree in economics, he joined the Income Tax Service in the early 1950s.

For the next fifteen years he followed his chosen vocation with vigour and dedication. It included his tenacious pursuit of tax evasion cases relating to some prominent politicians of eastern India. In at least one famous case his tenacity won the grudging respect of his quarry.

But the administration of income tax was too confining an activity for the breadth of his interests, especially in economics and public policy. In 1967 he took a year's study leave and returned to Presidency College as a senior fellow at its Centre for Economic Study.

The following year he was transferred to Delhi to serve at the finance ministry, initially in Revenue, then Banking and later in the Department of Economic Affairs (DEA).

The DEA became his professional home for most of the next eighteen years, with occasional forays into academics: a couple of years in the early 1970s writing his rigorous and thoughtful doctoral thesis on the "Concept of Income in Taxation" at JNU under professor Tapas Mazumdar, and later, another couple of years in the early 1980s as RBI Chair Professor at the National Institute of Public Finance and Policy.

During 1975 to 1980, he directed the DEA's Fiscal Policy Unit with unmatched distinction. From 1985 onwards, Amaresh was the jewel in the crown of NIPFP, the first ten years as its Director and the last thirteen as Emeritus Professor.

During his forty years in Delhi, Amaresh Bagchi was an invaluable resource to all those engaged in the conduct and reform of Indian public finance, especially tax policy, tax administration and fiscal federalism.

Perhaps uniquely among public finance specialists, he knew and understood the nitty gritty of tax administration. He could bridge the great divides between the "practical men" and the economists. And among economists he was equally respected by the academics of Delhi School of Economics and JNU and the policy types in government.

Almost every serious government report on tax reform owes some debt to Amaresh-da, ranging as far back as the 1972 K N Raj report on taxation of agricultural income and wealth.

More recently he was the key member of the hugely influential Raja Chelliah Tax Reforms Committee, whose reports (1991-93) guided the far-reaching tax reforms of the 1990s. In 1998-2000, he was the specialist Member and guiding light of the Eleventh Finance Commission. At the time of his death he was serving as a Member of the Commission on Centre-State Relations.

Amaresh Bagchi's scholarly output on public finance topics was prolific and diverse, especially during his 25 year association with NIPFP. Perhaps his single most influential contribution was the classic study (authored by him and his NIPFP team in 1994) on "Reform of Domestic Trade Taxes in India". This was the key document guiding the subsequent reform of state sales taxes (into state-level VATs) and exploring the options available for an integrated national VAT, which has finally culminated in the government's commitment to an integrated Goods and Services Tax (GST).

Over the last three decades, he published frequently in the Economic and Political Weekly, not just in his own name but often through unattributed editorials and commentary. Aside from his own writings, Amaresh also contributed enormously through his unstinting support and guidance to dozens of young scholars at NIPFP and to numerous civil servants with academic aspirations.

He was a true institution builder at NIPFP, toiling unceasingly to attract the best available talent, giving them the requisite freedom and flexibility and striving to maintain high standards.

Like most Presidency graduates and Bengali bhadraloks of his generation, Amaresh-da's politics were left of centre. Unlike many of them, his intellectual integrity and honesty rejected the cant and hypocrisy which often accompanied the Left's monopoly of political power in Bengal for the last three decades.

Especially in recent years, he was forthright and fearless in his critiques of West Bengal's weak economic and social performance, even though it provoked the ire of some friends and associates. Amaresh's humility and politeness were legendary.

They were matched only by his steely adherence to what he believed to be right and true. Characteristically, when I conveyed the news of Bagchi's demise to Governor Reddy of the RBI, his instant reaction was "a warm-hearted, humble man but utterly fearless. . . and with great intellectual integrity."

Amaresh Bagchi's lifestyle was simple and frugal. He was uncomfortable with the growing consumerism and widening disparities of Indian society and bemoaned the failure of the government sector in providing decent public services, especially education and health, to the vast majority of the country's citizens.

In our semi-feudal, class-ridden society, he was a natural democrat. Coupled with his innate warmth and humanity, he had authentic empathy for the weak and poor. Perhaps it was this warmth and humanity which was Amaresh's most endearing feature.

A small anecdote: in the mid-1990s, the Bagchis lived in our current flat in Delhi for a couple of years. They employed a part-time cleaning lady, who has continued to work in our building since then.

When we informed her of Amaresh-da's death, she spontaneously burst into tears, recalling her kind and good-hearted employer of a decade ago. I wonder how many of Delhi's luminaries would trigger such grief from their household help of yesteryear.

At the personal level, I feel immensely privileged to have been counted among Amaresh-da's friends. Although he was some 15 years older and we lived different lives, it didn't seem to detract from our mutual affection and respect.

When I first returned to India in 1982, to join NIPFP, Amaresh-da was there to help smooth my transition back to Delhi after 23 years abroad. Three years later he was there again to induct me into the finance ministry. I learned much about India and her economic problems from him.

Most of all, I am grateful for the opportunity to be friends with one of the most truly civilised and kind human beings to cross my path.

They say that when a good man passes away, the whole world feels a little diminished. I used to think that was just a turn of phrase. Unfortunately, now I know what it means.

Bagchi was a columnist for Business Standard in 2004-2006.