Chief Economic Advisor at a press conference in New Delhi | Photo Credit: PTI
it is generally accepted 1991 budget Which was presented by the then Finance Minister Dr. Manmohan Singh, is one of the landmark events in the Indian economic history. The budget is still widely lauded by neo-classical economic commentators because it marked a structural shift in India’s economy from the hands of the government to private enterprise, and the adoption of free trade. This, the prevailing wisdom at the time, was dubbed as the ‘Washington Consensus’.
Three decades later, many advanced economies, including the US, UK and Germany, are now reversing the course of economic nationalism and increasing the role of government in their economies through industrial policy, apparently in response to China’s economic power and trade weaponisation. as a response to. It is a profound shift in economic thinking – and perhaps the biggest symbolic victory for China’s economic model – that has forced the champions of the ‘Washington Consensus’ to back-paddle.
Disappointment
In this context, what should be India’s economic strategy? Should India also revert to increasing state control of the economy through an active industrial policy? In which case, should India exercise greater control over the exchange rate of the rupee? and impose trade embargoes? The Russia–Ukraine conflict has huge geo-economic consequences by recreating a full bipolar world order of the China/Russia bloc as compared to the Western bloc of nations. How will this affect India’s economy, especially given that we seem to have insisted on a bilateral currency arrangement with Russia for trade except the dollar? All these are questions that are extremely important and urgently needed, demanding serious discussion and debate among policy thinkers and makers.
economic survey Submitted by Chief Economic Advisor a day ago union budget It has generally been a medium to raise issues for public discussion and consideration on such strategic economic matters. At least this has been the case for the last decade. Surveys in previous years covered various issues like universal basic income, economic divergence between states, steps to improve property tax revenue using satellite technology, new way of calculating inflation using Indian plate, estimating internal migration of people. Ideas and issues came up. On. Many of these may not even be fully developed or well-researched policy ideas, but at least serve as an intellectual public good by triggering a debate and forcing policy influencers to think about these issues. Worked in
Disappointingly, the Economic Survey 2022-23 did not provoke any such deliberations or discussions. It is a dry compilation of statistics to prove the economic performance of the Narendra Modi government. The Economic Survey has 66 tables and 246 charts with cherry-picked data points (like Figure II.8) that seek to paint a stellar image of the government’s economic management and blame the previous dispensation for all ills, Which is probably an occupational hazard. And an inevitability in the current climate of politics and government. But there was some new and interesting data in the survey – on the housing market, digital infrastructure, etc. – and putting such a vast amount of economic data in the public domain is a commendable service in itself.
Unlike previous years, this year’s survey has only one volume and a separate ‘highlights’ volume that creatively and simply presents key messages to a larger audience. The broad story is that the Indian economy has recovered from the novel coronavirus pandemic, but is still at the mercy of global geopolitical developments; And so the Economic Survey has been scrupulously cautious about future growth and inflation. Unsurprisingly, it also announced both the Goods and Services Tax (ostensibly because it improved tax buoyancy) and the 2019 corporate tax cut (as it apparently helped clean up bloated corporate balance sheets). A rosy picture is painted. The chapter on social sector is in-depth as compared to previous surveys conducted on issues of employment, rural wages, demand under Mahatma Gandhi National Rural Employment Guarantee Act and other important human capital topics supplemented with large amount of data. But an analytical discussion on employment intensity of contemporary economic growth models and ideas to boost job creation is missing. Instead, the chapter vaguely concludes that the Prime Minister’s vision of ‘minimum government maximum governance will be the key to equitable economic growth’ in what sounds like a Bharatiya Janata Party manifesto.
government line mirror
The survey expressed happiness over the government’s capital expenditure increasing from 12% of total expenditure in 2014 to 19% now. With much global uncertainty, sluggish corporate investment and uncertain asset markets, the thrust on public capital expenditure to boost the economy is prudent and wise. On private sector investment, it talks about stimulus plans linked to manufacturing and production with grand but baseless claims to attract Rs 3 lakh crore in capital investment over the next five years and create six million new jobs. does.
Like the then government, the Economic Survey also suffers from the malaise of ‘take the credit for the rains but blame nature for the drought’, while despite the ‘Make in India’ hype, manufacturing Gross Value Added (GVA) is only 4% (real) Joe blames corporate ‘indigestion’ from the huge debt accumulated during the previous regime, even before the pandemic hit.
Still, it is neither unreasonable nor unreasonable to expect a little more intellectual acuity in some of the pressing economic issues of trade, industrial policy, the capital account and inequality that the whole world is grappling with right now. And also because the Chief Economic Adviser is uniquely qualified and intelligent, who would have thought deeply and formed an opinion about the direction India should take at this current crossroads of economic strategy.
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The Economic Survey is in fact the only medium in the country for rigorous, thoughtful and nuanced discussion of new economic ideas. Perhaps this was a deliberate and deliberate move to stick to data and facts to provide a report card of the government’s economic performance, and not doctorate economic road maps to spur discussion in the public sphere like previous surveys. Thesis. Regardless, it’s always easier to be a commentator than a player, albeit less fun and impressive.
Praveen Chakraborty is a political economist and the President of Data Analytics of the Congress Party