Kaushik Basu suggests 10 points for turnaround in ten months
Expressing confidence that the Indian economy would turnaround if growth is put on fast track, Chief Economic Advisor Kaushik Basu on Friday said that he refused to accept Standard & Poor's (S&P) recent negative rating of the country's fiscal situation, as "frenzied policymaking" would normalise the prevailing atmosphere.
Underlining measures like administrative reforms, higher tax to GDP ratio, foreign direct investment (FDI) in multi-brand retail and "intelligent" decontrol of fuel pricing, Basu listed 10 measures to revitalise the economy in 10 months, while delivering the inaugural Distinguished Lecture Series organised by the International Management Institute.
Titled "Ten Policy Imperatives for Next 10 Months", Basu was clear while delivering the lecture that all the measures, were basically his personal views.
"Though S&P cannot be ignored, I disagree with its assessment as India will turnaround and do better. It needs to put growth on fast track," he said, adding that large scale administrative reforms would be required to clear the country's decision making mechanism from overlapping.
Citing examples of how committees consisting of 10-15 members are immediately formed in India for resolving any issue and then each member instead of helping the head of the panel prepare a single concise report, tries to come out with a report of his or her own, Basu said that there is a need to cut down this kind of overlapping apart from coming down hard on red-tapism and bureaucratic lethargy.
Batting for the cause of the "aam admi" and the poor, he said that they should get subsidy and support and the Food Security Bill should come, as "people have right towards food". Basu also favoured FDI in multi-brand retail as it would greatly help in bringing down prices of commodities.
"A prime reason for costly commodities is cartelization at the middle-level. FDI in multi-brand retail will help in cutting this down," he said.
While suggesting greater transparency and autonomy in higher education sector, Basu also said that Government should consider giving credit line to various countries in rupee, as it would soon become a convertible currency and this would help in boosting the export sector.
"We also need to help the North-east region and open up trade facilities there," Basu opined.
In what he termed as a measure which many not like, Basu also called for higher tax to GDP ratio for which more taxes need to be collected. He also emphasised on the need for improving the infrastructure of smaller towns as manufacturing growth has fallen and by developing towns, surplus labour available in such places would get more work.
He also highlighted the need for taking "big decisions" on the infrastructure sector and called for privatisation of state-owned carrier Air India, saying that spending public money to revive a public carrier "is not the right way". Claiming that by subsidising the common man's fuel like kerosene and cooking gas and, leads to their black marketing, Basu said that the Government by simultaneously taxing the common man and covering losses of state-owned oil marketing companies gives rise to a tilted scenario, which scares away the private player.
"In order to provide a level playing field to all and to involve the private sector in the fuel sector, a per-litre subsidy mechanism is needed," the economist said.
Basu said that the basic values of honesty and integrity would cement the country's resolve to turn around the economy.
Expressing confidence that the Indian economy would turnaround if growth is put on fast track, Chief Economic Advisor Kaushik Basu on Friday said that he refused to accept Standard & Poor's (S&P) recent negative rating of the country's fiscal situation, as "frenzied policymaking" would normalise the prevailing atmosphere.
Underlining measures like administrative reforms, higher tax to GDP ratio, foreign direct investment (FDI) in multi-brand retail and "intelligent" decontrol of fuel pricing, Basu listed 10 measures to revitalise the economy in 10 months, while delivering the inaugural Distinguished Lecture Series organised by the International Management Institute.
Titled "Ten Policy Imperatives for Next 10 Months", Basu was clear while delivering the lecture that all the measures, were basically his personal views.
"Though S&P cannot be ignored, I disagree with its assessment as India will turnaround and do better. It needs to put growth on fast track," he said, adding that large scale administrative reforms would be required to clear the country's decision making mechanism from overlapping.
Citing examples of how committees consisting of 10-15 members are immediately formed in India for resolving any issue and then each member instead of helping the head of the panel prepare a single concise report, tries to come out with a report of his or her own, Basu said that there is a need to cut down this kind of overlapping apart from coming down hard on red-tapism and bureaucratic lethargy.
Batting for the cause of the "aam admi" and the poor, he said that they should get subsidy and support and the Food Security Bill should come, as "people have right towards food". Basu also favoured FDI in multi-brand retail as it would greatly help in bringing down prices of commodities.
"A prime reason for costly commodities is cartelization at the middle-level. FDI in multi-brand retail will help in cutting this down," he said.
While suggesting greater transparency and autonomy in higher education sector, Basu also said that Government should consider giving credit line to various countries in rupee, as it would soon become a convertible currency and this would help in boosting the export sector.
"We also need to help the North-east region and open up trade facilities there," Basu opined.
In what he termed as a measure which many not like, Basu also called for higher tax to GDP ratio for which more taxes need to be collected. He also emphasised on the need for improving the infrastructure of smaller towns as manufacturing growth has fallen and by developing towns, surplus labour available in such places would get more work.
He also highlighted the need for taking "big decisions" on the infrastructure sector and called for privatisation of state-owned carrier Air India, saying that spending public money to revive a public carrier "is not the right way". Claiming that by subsidising the common man's fuel like kerosene and cooking gas and, leads to their black marketing, Basu said that the Government by simultaneously taxing the common man and covering losses of state-owned oil marketing companies gives rise to a tilted scenario, which scares away the private player.
"In order to provide a level playing field to all and to involve the private sector in the fuel sector, a per-litre subsidy mechanism is needed," the economist said.
Basu said that the basic values of honesty and integrity would cement the country's resolve to turn around the economy.
