‘Bare necessities delivered in 2018 significantly better than 2012 level’
NEW DELHI: A day after he presented the Economic Survey, chief economic adviser Krishnamurthy Subramanian spoke at length about the finer points of his assessment of the economy, India’s response to the Covid pandemic, the farm protests and more with
Edited ble. When people say that a decline has happened for the first time in 40 years, we must keep in mind that we have encountered a pandemic. Even if there was no lockdown, we would not have travelled or visited restaurants, and the uncertainty would have impacted discretionary spending, consumption and investment. increased, which means that there was no consumption. During the lockdown, people would not have indulged in discretionary spending, it would have wasted fiscal space. Once the unlock was initiated, discretionary spending was focused on.
I think we have to look at the strength of the economic argument rather than the person making it. The chapter on inequality and growth in the Economic Survey has a resounding answer to such arguments. I think their commentaries are based on conversations in advanced economies, where there is a conflict between inequality and growth. In India, this kind of tension doesn’t manifest. The stage of India’s development is different. Our potential growth rate is much higher and the opportunity to lift people out of poverty is also different. So, we should be focusing on growth. We have stated in the Economic Survey that about 85% of the reduction in poverty has come from economic growth. Those resources can be used for redistribution. trickle-down effect does not involve redistribution. Dr Manmohan Singh should note that there has been significant improvement in the bare necessities delivered in 2018 vis-a-vis 2012.
Given our state of development, we have to be careful. We don’t just want to read the Thomas Pikettys of the world who make good arguments for advanced economies because we can’t cut, paste and implement them here. We should continue to focus on growth so that the pie expands.
I think the Pm-kisan [Yojana] has provided a safety net. It is important the small farmer is provided options. At present, the small farmer is beholden to APMC [system] and the middleman.