You came from an academic, theoretical economics background – but you’ve been chief economic adviser to the Indian government for just over a year now. What, would you say, is the main challenge facing the Indian economy?

In terms of pure energy the Indian economy today is remarkable and, not surprisingly, it is growing very rapidly. At the same time, there are stretches of the country that remain poor – huge swathes of it. The segment of the population that is below the poverty line is very large. It’s a strange dichotomy that the economy, overall, is vibrant beyond measure, but at the same time there is a segment that is getting left behind. This is the central challenge for India today. This is not just about economics. It creates political tensions of a kind that early India did not see.

It’s into this exciting policy cauldron that I arrived, a greenhorn. It’s been a very challenging one year and five months. As one would expect in a newly emergent economy, there is a lot of messy politics, of course, but also, very, very fortunately, there’s a bunch of people – not too many, but a few politicians, bureaucrats, policymakers – who are just wonderful, intelligent and committed people. There is corruption, there is a lot of chaos around that one can see, but there’s also this small group that has made it all worthwhile for me. At the same time, I do hanker for my academic life, and believe I will go back to it eventually. But this has been just a very positive experience.

If you have one focus then, is that how to make Indian society less unequal?

That is certainly one of my objectives. We have to include everybody in the growth bonanza. As an academic I wrote a paper pointing out that very often the equity objective and the growth objective are treated as two separate targets [for an economy] but that is not right. I argued that a good way to evaluate a society is by its bottom 20%. It is a kind of Gandhian-Rawlsian rule that I like. You evaluate the wellbeing of the poorest 20% of the population and also track the growth of this segment. Since joining government, I have written about this interpretation of inclusive growth in official documents. It keeps you sensitive to the importance of growth but it is the bottom 20% you are focused on; so equity comes in through that door.

But I’ve been brought in as chief economic adviser, which means there is a whole set of tasks on my table. I have been working on fiscal policy and macroeconomic demand management, on India’s position in the G20 and inflation management and monitoring. The latter has been quite overwhelming. India is inflating faster than it has done in the past, and faster than many other countries, so that’s been a major challenge.

What’s the inflation rate now?

It’s 9%, and India has not historically been a high inflating country, like so many Latin American countries have been in the past. So 9% in India is considered unacceptably high.

It must be amazing to come from an academic background and then have the chance to implement your ideas.

It is actually amazing, and exciting. Also to watch politics from within is great fun. It’s the first time in my life that I am writing a diary. It is an anthropologist’s dream come true, seeing some of the political manoeuvrings up close, the build up of challenges and tensions and the crafting and implementation of policy.

In the past, I interviewed Eric Maskin– a 2007 economics Nobel laureate – on the financial crisis. He pointed out that to get politicians to pay attention to economic theory is very difficult.

Yes. Luckily, the Indian prime minister, Dr Manmohan Singh, is a natural intellectual and is sensitive to new ideas. But he is in a minority. In fairness, there are Indian politicians who have risen from the grassroots with concerns about inequality and poverty and a genuine desire to do good. But the number of such politicians is limited. By and large, Eric Maskin is right. It is a challenge to hold the attention of politicians on matters of economic analysis.