It is tempting for a bright Indian to leave India. The returns on education and intelligence are higher in richer countries; and in many occupations, the rules of employment are fairer and more transparent. It is, therefore, not surprising that Raghuram Rajan made a shining career in the Booth School of Business.

But there is a part of economics that teaches us to make better or more robust policies; hence those who have learnt economics also want to try out their policy-making skills. The skills of some, like Parthasarathi Shome, have an international market; they have no difficulty advising rulers in Britain or Bolivia. But occupational and material success abroad does not wipe out their innate patriotism; when they are offered a chance to serve Indian policy-makers, few can say no. That is how Raghuram Rajan ended up in Delhi when Manmohan Singh told him to come and serve his country. But politicians have neither good judgment of policy nor a sense of decency. So it is not surprising that the Bharatiya Janata Party government indicated to Rajan that he was no longer welcome, and after four years of policy involvement, he went back to Chicago.

But even when he was out of India, he gave it a thought every once in a while. In March 2004, he spoke to the India Today conclave. He ticked off India's strengths: rapid growth of its total factor productivity, projected growth in its workforce, and its strong institutions - democracy, courts, press, education and enterprise. To exploit them, he suggested that India should strengthen incentives, improve investment infrastructure, make the economy more flexible, and improve safety nets. "This is a Marathon," he said, "and India has just finished warming up."

By January next year, he was tired of the litany of India's strengths and weaknesses. In a speech to a non-resident Indians' forum, he said that India was increasingly being mentioned together with China, which suggested that its time had come. But, he asked, does it have the necessary mindset? Does it have the self-confidence that led to the rise of Japan in the 1950s and 1960s, of Korea in the 1970s and of China today? That is what would make it intolerant of corruption, poor quality, laziness, and give it the courage to open itself up to the world. It has strong constituencies against competition - politicians, old people, farmers and agricultural workers amongst others. How can the resistance to competition be reduced? He suggested better education, better access to finance, improved rural infrastructure, and lower fiscal deficit, which was a necessary precondition to external opening up. He called for a less intrusive government, and equal treatment of domestic and foreign business. And he argued for a social safety net consisting of unemployment insurance, pensions, and public healthcare.

The following January, in a speech to the Forum for Free Enterprise, he was critical of the licence permit raj that ruled till the 1980s, but pointed out that it had created skill-intensive industries. He warned against destroying this legacy and pursuing labour-intensive industries as China did. On the other hand, he also pointed out the ineffectiveness of trying to get things done by government order. The government, in his view, needed to create incentives for better growth. The solution to poor teaching was not more expenditure on schools; it was to ask why teachers bunked classes and taught so little when they attended. And the solution to poor working of the government was not to pare it down, but to make it more transparent, effective and responsive. Finally, he warned against linear projections such as those made by Goldman Sachs. Growth is always accompanied by structural change, which is more important and less easy to predict.

In those early years of his career, Rajan was teaching in American and European universities or was economist to the International Monetary Fund. He used to descend on India once or twice a year, and give sermons based more on impressions than on facts. Then, in 2008, he was asked to chair the financial reforms commission. So he got down to studying the current reality, and his speeches became more focused and solid. He showed that in India, banks mostly lent to the rich; the poor borrowed mostly from relatives, friends and moneylenders. The government forced banks to lend to farmers and small entrepreneurs; but they chose the richer ones. It controlled banks' lending rates and kept them down. The gross cost of lending to the poor, including interest, risk of bad debt and customer identification came to 25-30 per cent, far above what banks were allowed to charge. So they avoided poor borrowers. Banks charged lower interest than moneylenders and relatives; so to get loans from banks, the poor paid generous bribes. And because the government did not let banks charge high interest, they also paid low interest on deposits. So putting savings in deposits was a sure way of losing value. The way to make money was through stock and property markets, which were open only to the rich. So he suggested introducing more competition by allowing more small banks. He proposed that anyone who lent to the eligible poor should get a certificate which he could sell; any bank that was supposed to lend to the poor could buy a certificate instead. The certificates would give lenders to the poor an implicit subsidy.

The exposure to India from 2008 onwards gave Rajan many ideas about more intelligent policies and cleverer solutions; they are to be found in his speeches right up to 2016. But reading them also gives us an idea of how few of those ideas were realized. Rajan learnt in those eight years what I had learnt in my two years in the finance ministry in the 1990s: that those who man the government are experts at sabotaging reforms. Rajan's parting from the government was a sad one. But it had one silver lining: that he was now rid of the frustration that went with occupying a responsible position in the government. Good economists join and serve the government every once in a while in the belief that they are thereby serving the country and making Indian lives better. They keep trying until they fail. Eventually they come to the conclusion that if one has to get involved with India, it is best to write for the public, in the hope that one's ideas will eventually become so popular that the government would be forced to adopt and implement them.

Will Rajan come to that conclusion? We have to wait and see. But meanwhile, his handful of speeches while he served India pulsate with ideas; they provide a good stimulus to thinking about India. They are so good that one hopes more good economists will make his mistake, waste years trying to reform policies, and in doing so, give us inside accounts of how our government malfunctions. The only problem is that the number of good Indian economists is not all that large; and most of them would learn from examples like Rajan's, see what a stupid idea it is to serve the country, and keep out of it.