Planning Commission deputy chairman Montek Singh Ahluwalia today said that ensuring good economic practices may not always be politically comfortable, but to think that it is impossible may be ?damming the country.?
Addressing a gathering at a CII event here, Ahluwalia said that from 1991 onwards the story has been one of good economics. ?I firmly believe that good economics can be good politics, but it may not be easy. The notion that good economics cannot be made good politics, I don?t think that it is correct. It can be possible if the electorate is adequately informed,? Ahluwalia added.
He pointed out that bad policies mostly exist because there are some vested interests, and the electorate need to judge who are benefiting from the policies of the government. ?There are not too many things which benefit everybody. There will always be some who would be hurt. Unfortunate, all of us in the business have not done enough to create an environment where electorate would understand merits and demerits of a policy,? he said.
Ahluwalia cited that even in the US, some Nobel Prize winning economists have argued that the US administration should adhere to the path of fiscal consolidation, while others have firmly opposed it warning of an adverse economic impact. So divergent views are likely to be there on certain economic issues.
Pitching for realigning domestic energy prices with global prices in view of rising imports, he contended that the government needs to explain to people that if international price of petroleum rises to $160 (per barrel) then domestic price would also go up, but anybody in political space may not feel comfortable to do so.
For instance, he said lowering power tariff in Delhi would result in default of payments by distribution firms and may trigger long hours of power cuts. He praised Delhi chief minister Sheila Dikshit for her candid position on the issue of rising power bills.
However, Ravi Shankar Prasad, a parliamentarian from the BJP countered Ahluwalia on the issue of upping energy prices, he claimed that governments of Gujarat and Madhya Pradesh have been success providing electricity round the clock without resorting to hike in prices.
