Indian Economists and Their Ideas
Sukhamoy Chakravarty: Planning and Money
How Sukhamoy Chakravarty shaped Indian planning theory and chaired the 1985 committee that reformed the RBI's approach to money supply.
Sukhamoy Chakravarty (1934-1990) was a leading Indian economic theorist.
Planning
- A member of the Planning Commission in the 1970s.
- His book Development Planning: The Indian Experience (1987) analysed India’s planning strategy and its limits.
The Chakravarty Committee
- In 1985, he chaired a committee reviewing India’s monetary system.
- It recommended monetary targeting: controlling money supply growth to manage inflation.
- It also urged better coordination between fiscal deficits and money creation.
Economic Advisory Council
He chaired the Prime Minister’s Economic Advisory Council in the 1980s.
Teaching
He taught at the Delhi School of Economics, influencing many students.
Legacy
His committee’s ideas shaped the RBI’s policy framework until the move to inflation targeting in 2016.
The money target
Following the Chakravarty Committee, the RBI set targets for money supply growth to keep inflation in check.
Thinking India's monetary framework never changed
It moved from monetary targeting to inflation targeting.
Key takeaways
- Chakravarty was a leading planning theorist.
- His 1985 committee recommended monetary targeting.
- He chaired the PM's Economic Advisory Council.
- His ideas shaped the RBI until 2016.
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