Thank you.

And now finally, for the SKOCH India Economic Lifetime Achievement Award, the award goes to Dr M. Govinda Rao, Councillor, Takshashila Institution, former member of the 14th Finance Commission. India’s policy discourse has immensely benefited from Govinda Rao’s contributions in public finance and fiscal policy, and in particular in the areas of fiscal decentralization and federalism. He was persuasive in ensuring that the 14th Finance Commission incorporated the planned requirements of the states, which resulted in the 10 percentage point increase in tax devolution.

Members of the SKOCH family, distinguished invitees, members of the media, ladies and gentlemen, I’d like to express my heartfelt thanks for honoring me with this lifetime achievement award this year. This has come as a great surprise, just as it must have come as a surprise for many of you. That’s because I’ve always kept a low profile, and I never came from or have been a part of a high street, not advertise myself in my works except for those with whom I had close interactions. Not much is known of me. It must have taken a lot of effort to identify me too and opt for the honor.

I am grateful for those who recommended. I believe Vivek was one of those who recommended me for this honor. Sure, it has been long and hard. Sameer talked about his background, but he was at least in an urban area. If you have to come from a rural area, it’s an entirely different thing to do. So he talked about electricity bill — we didn’t have to pay because there was no electricity. He talked about the water supply bill — we brought the supply, hard difficulties. We didn’t have proper water supply anyway. But then since it’s a village, any water is fine.

To be sure, it has been a long and arduous journey. I have completed 75 years, of which 50 years have been spent in research in economics. I came from a remote village in a coastal part of Karnataka, with no roads or electricity. There is no clock in the house, and we had to guess the time for going to the school by looking at the position of the sun and length of the shadows. And often it used to rain a lot, and then it was just a random thing that, you know, you think that this is the time and then you go to the school.

My parents had no formal schooling, and my brother, who was the first matriculate in the family, had left the house for his higher studies to a far-off place a year before I was born. I used to see him only during summer vacations, and in many ways he was my role model. I used to see him only — in fact, he was the one who eventually pioneered the satellite technology for this country by designing and producing Aryabhata, the first Indian satellite, and built an advanced space research in the country as a Chairman of the Space Commission.

There was no expectation from me from my parents as far as education is concerned. They said, since the boy is passing, let him go through, go to the school. When I completed my BA, I had to ask my brother to finance my higher studies, and he asked me to go over to Ahmedabad, where he was working in the Physical Research Laboratory. The problem with the university was that even English language was taught in Gujarati there. So I had to learn my economics in Gujarati, which I didn’t know.

I am eternally grateful to all my teachers and colleagues, with whom I learned a lot in my research career. Very interestingly, I started my research with a professor who had taken over as the Director of Sardar Patel Institute of Economic Research in Ahmedabad, and immediately after my MA, in fact he invited me to join him.

Later I worked with a gentleman called Shiv Shankar Prasad Gupta, who had just returned from UK, from University of Leeds, and he was a student of Peacock and Wiseman, and possibly one of the best public finance experts. And he was in Sardar Patel Institute. But there were some problems. We left over to Sambalpur University, and he persuaded me to go, and there was a name after all. I was not one of those smart urban kids, so I decided to go to Sambalpur, only to realize that there was no research either — the research atmosphere, a research culture, or research infrastructure. So obviously I had to move all over the country to do my PhD.

He persuaded me to join him, and I joined him. But it’s only later, way back in 1977, when Dr Chelliah started the National Institute of Public Finance and Policy, he happened to see a couple of my articles and found out where I was and asked me to join. I left the Sardar Patel Institute and joined the National Institute of Public Finance and Policy. In fact, it was housed in Rajendra Place in one of those rented places, and it’s from there I grew with the institute.

I grew with NIPFP, and Dr Chelliah was, in that sense, my mentor, particularly on tax policy and reforms. Not that I agreed with many other things that he said, and we used to always have constant arguments, but then he put up with me.

Later I had the benefit of close association with Richard Bird, who was my real guide and critic, at the University of Maryland where I was a Ford Foundation fellow, a postdoctoral fellow, with whom I had learned a great deal on fiscal federalism because he was, in all the senses, the father of fiscal federalism literature. And Albert Breton, who was a great public choice theorist, and then I had a great friendship and a lot of interactions with him. In fact, he visited the NIPFP for a month. He visited the Institute for Social and Economic Change for a month at my invitation to interact with the faculty there.

At NIPFP I had great colleagues, notably Arun Kumar Gupta, who was a critic and a sounding board, and he would call a spade a spade, and that’s a great quality. And of course we had Amaresh Bagchi, whose counsel was great on practical issues of tax policy. If there is anything of note I have done, it’s all due to them.

I would like to narrate two incidents where I did the devil in policy which had a direct bearing on policy, besides being a backroom boy. In fact, most of the time we are backroom boys.

The first was in 1993, way back, when I wrote a paper on taxation of services in the Asia-Pacific region for the Asian Development Bank conference. As usual, someone told me that the best place for the paper was the nearest trash can. But then I wanted a second opinion and sent it to Dr Chelliah, who by then, after finishing the tax reform committee reports, was actually in the Finance Ministry implementing them, at the invitation of Dr Manmohan Singh, who was the Finance Minister.

So I sent it to him, and then Dr Chelliah always used to read whatever I wrote, and the next day he said, you come over. So I went to him, and he said, Govind, this is a very good paper. He said, but then I want you to do one thing. I want you to write a note for me on taxation of services in India now.

Then he said, I will give you 10,000 rupees for doing that. And I said, you keep your 10,000 rupees, I will write a note. But then give me time. He said, all right, you know, if you don’t want the money, you give it to the institute.

After a week he calls me and said, where is the note then. I said I was bargaining for time. Now I lost money as well as time. So he actually put Mr Gautam Ray to work with me. And in a few days’ time we prepared a note on taxation of services.

We suggested that, you know, in the Seventh Schedule to the Constitution, tax services is neither in central list nor in the state list. So we made a recommendation that India could start taxation of services invoking Article 248 and 97 of the Constitution, which says that if it is neither in any of the lists, it goes to the Centre. And we suggested to begin with three services which are non-life insurance, stock brokerage, and telecom.

Lo and behold, I didn’t know that this was that important. For the first time, service tax was levied in the 1994 budget based on this note.

The second incident that comes to my mind was much later. I was made Chairman of the Task Force on Taxation of Services and Chairman of the Expert Committee on Taxation of Services. And that was this committee which actually said: tax all services, give tax credit to goods against services, services against goods at the central level, reduce the number of tax rates in excise duty, and then when you give this tax credit to goods and services, it becomes a goods and services tax at the Centre.

This is the first committee that actually made that recommendation. And I was asked to make a presentation to the Task Force on Indirect Taxes chaired by Kelkar, and basically took it. And then, of course, the second recommendation was: give concurrent powers of taxation to states and work out the place of supply rules. At the same time, take away the interstate sales tax or the central sales tax so that the state can convert their value added tax into a goods and services tax.

This was the second recommendation that was made. This was presented to Dr Kelkar, and Dr Kelkar, in his indirect tax report, put the same recommendation, and he became the father of goods and services taxation. It doesn’t matter who did it, but the point is that this particular thing came first from the expert group on taxation services.

I had the opportunity of reviving and advancing research in two institutions. Yesterday someone was mentioning that both the institutions when I took over were in a very bad shape, things improved, and I left, and both the institutions got into bad shape. Of course it was revived again, and at least I had the satisfaction of creating some.

In fact, for four years in National Institute for Social and Economic Change in Bangalore, and 10 years in National Institute of Public Finance and Policy, this gave me an opportunity to work on a variety of themes with a number of younger colleagues, and I am grateful to them for putting up with me — in fact, putting up with my often very unreasonable demands.

At NIPFP, I initiated a refresher course training for university teachers in public finance during summer vacation, and that became a very popular course. A large number of university teachers attended them over a period of 10-8 years. But then this was stopped once my successor took over because he didn’t have the time. But of course I understand that now it is being revived, and I hope at least that will be a connection they will continue with the universities.

Well, I have spoken long enough, and I do not wish to continue. But I wish to continue doing my research and writing. And let me once again thank Mr Kochar, Dr Debroy, SKOCH family for honoring me.

Thank you very much.

Participants at the India Economic Forum - India 2047