(Image source from: Budget 2016 – Expectations and reality)
Chief Economic Advisor Arvind Subramanian said on today that the government will have to go through a “very difficult process” of pushing reforms and projects to propel India to a high-growth path as it will not happen through some magic wand.
“We highlight somethings which could have been done, but have not been done. GST, the strategic disinvestment – that is certainly what we need to do. The whole corporate and bank balancesheet challenges are really important to address,” he told.
“It is a very difficult process. There are a lot of stakeholders. Lots and lots of projects that need to be sorted out. And a fair amount of money is required for this. So, we have to work through this process slowly and steadily. It is not going to happen through some magic wave of the wand,” he said.
“This year, the global economy is very very difficult. What is unique about the world at this stage is that there are such a few pockets where you can say that it is stable and robust. India is the only bright spot. But our prospects will be affected by what happens everywhere else in the world,” he said.
He said, "I am very glad that I am not the Chief Political Decider, I am just the Chief Economic Advisor. Sometimes, the CEA is above views. And this time, I am above views. I have no views. You will see that on Monday (when the Budget will be unveiled)."
Income Tax relief on small savings schemes such as public provident fund (PPF) and subsidies on commodities such as cooking gas and electricity, benefit the "well-off", and cause a loss of Rs. 1 lakh crore to the exchequer, according to the Economic Survey.
"Addressing these interventions and rectifying some egregious anomalies may be good not only from a fiscal and welfare perspective, but also from a political economy welfare perspective, lending credibility to other market-oriented reforms," the Economic Survey noted.
Some economists, including NITI Aayog vice chairman Arvind Panagariya, have suggested that the government should go in for higher public spending to achieve higher growth, others, including RBI governor Raghuram Rajan, have cautioned against deviation from the fiscal discipline path.
By Premji
