Ajay Shah on Institution Building, AI and the Reform India Needs

In this episode of Decoded, Shrreya Loomba and Aly Muhammad Dadwani sit down with Ajay Shah, an economist and co-founder of the XKDR Forum who has worked in academia, policy research and the Ministry of Finance. He trained as an aeronautical engineer at IIT Bombay before moving into economics, and he co-hosted the podcast Everything is Everything with Amit Verma. It is also Shrreya and Aly’s first episode as co-hosts.

Ajay begins with his father, who died when he was 18, and the questions about what is worth doing that he says he inherited from him. He explains why economics felt like the right balance between physics and engineering, and why Manmohan Singh’s 1991 budget pulled him back to India. He talks about building research teams with Susan Thomas, what Bell Labs, RAND and the Cavendish Laboratory suggest about culture and incentives, and how XKDR chooses its problems. That includes the three questions he thinks matter most today: defending economic growth, climate change and populism.

A big part of the conversation is about AI and learning. Ajay argues that homework and projects no longer work as they used to, and that handing intellectual work to an LLM costs you your own growth. He describes two uses he thinks are worth it: AI as a tutor that suggests reading lists and runs diagnostic tests, and AI as a critic that finds mistakes in work you have done yourself. Drawing on Terence Tao, he also explains why he thinks proofs that nobody understands are not the same as mathematical knowledge.

The conversation ends on one question: if India could make a single reform for long-term growth, what should it be? Ajay’s answer is removing barriers to trade, capital, services and people, and having the state treat foreign and domestic firms the same.

Thank you to Deepanshu, Agrima, Anubhav, Aly Muhhamad, and Aarav for their help with research, outreach, and questions for this episode, and Nischay for help with Audio Production.

clarity before consensus.