Chief Economic Adviser Arvind Subramanian today said big bang reforms are frankly not applicable to a country like India...
Chief Economic Adviser Arvind Subramanian today said big bang reforms are frankly not applicable to a country like India as there was multiple veto centres, multiple decision making centres and was very difficult to pass through a decisive change.
“Talking about big-bang reforms, one thing we have said in the Survey that these big-bang reforms are frankly not applicable to India, because if you look around the world, big-bang dramatic reforms happens around crisis”,he said while making a presentation on the Economic Survey of India 2014-15, organised by trade body SICCI and Madras School of Economics.
“Big bang reforms are not easy to happen in democracy. In democracies, you have multiple veto centres, multiple decision making centres and it is very difficult to push through decisive change and if you look at India at this juncture, we are not in crisis,” he said.
Stating that the economy has far improved compared to July 2013, he said, “it has been a dramatic improvement. If you look at where India was in July 2013, we were coming out from the edge of macro-economic crisis, but since then you know, inflation has come down, current account deficit improved, stock prices have gone up”.
“The broader thing that we are seeing is, some signs of revival growth. Certainly, the deceleration (of the economy) has bottomed out and India has become an attractive destination in international context”, he said.
“I think we had the growth forecast for this year at 7.4 per cent. Key thing is we have said going forward whatever the number is today, growth will accelerate a little bit more because of three favourable factors”.
“One, oil prices have come down… two, firms are registering profitability, monetary easing has begun. So our growth this year and next year should be greater than 2014 and 2013. Thats how we arrived at our forecast for 8 to 8.5 per cent growth”, he said.
Pointing out that the Budget has managed to combine macro economic discipline, he said, “if you look at the fiscal indicators from the government between the Centre and States, we found surprising capital expenditure, which is going to go up by Rs 150,000 crore, which is not much as we wanted”.
“But if you combine that with the States, actually, the increase is almost 0.5 per cent. So this is eureka moment for me. Because when you look at Centre and State finances as a whole, States get more consolidation from the Centre”, he said.