‘Serious reforms can turn around economy in a year’
NEW DELHI: A top functionary has blamed “administrative reasons” for about 1.5 percentage point dip in India’s economic growth, in a note to Prime Minister Manmohan Singh, adding that growth can reach “6.5% in a year if the bureaucratic bottlenecks” are removed.
A former United Nations officer and director general of the government’s Independent Evaluation Office Ajay Chhibber said that Parliament’s nod is not required to revive the economy, which has slipped to about 5 % in the current financial year from over 8% in 201011, and quick administrative decisions would have helped the economy better.
“To return to 8% growth, we need serious reforms in labour and regulatory framework and that will take time. But, I think a good stable government which takes quick decisions can take the growth to 6.5% within a year,” Chhibber, who was in the running for the post of chief economic advisor to the finance ministry, said.
Stating that he has raised these issues in a note to PM, Chhibber wondered at high inflation in India when the world was passing through a phase of deflation.
“A reason for high inflation was administrative inefficiency in take steps that could have eased price rise,” he said, while sympathising with the Reserve Bank of India for not reducing interest rates.
Chhibber was also of the view that the present regulatory bodies, most of which are headed by retired bureaucrats, have created a new license raj. “Unless regulatory mechanism was not reformed and right kind of people head regulatory bodies, economic revival would be difficult,” he added.
He also said that the inefficient expenditure by the government for big social sector projects such as Mahatma Gandhi National Rural Employment Guarantee Scheme had its adverse impact on overall economy. “The MGNREGA caused a wage price spiral but the programme did not result in positive outcome as envisaged,” he added.
The government’s 4.5 time increase in spending in the social sector without a proper implementation mechanism had come under lot of criticism from experts, who had termed it as a colossal waste.