In vibrant democracies like India, with multiple veto centres, it is “unreasonable” to expect “big bang reforms”, country’s top economist has said.
In his maiden public appearance in Washington after being appointed as India’s Chief Economic Advisor last year, Arvind Subramanian, also told a top American think-tank this week that India is “still very much a recovering economy, not a surging economy”.
He said though it was unreasonable to expect big bang reforms announcement in annual budget, the new “government is moving ahead” slowly but steadily with a series of key policy and fiscal reforms that “would change” the face of India in the years to come.
“This budget maintains and accelerates the reform momentum,” he said.
“Big bang reforms in robust—what I say frustratingly vibrant democracies such as India—are the exception, rather than the rule. In countries like India power is so dispersed, there’s so many veto centres—the Centre, the states, different institutions.
“You know, the power to do, undo, block, is so extensive, that, you know, it’s a bit unreasonable,” Subramanian said in his address to the prestigious Peterson Institute for International Economics.
“India is neither in crisis or was neither in crisis. I mean, nor is it one of those places where you can just pull these levers and expect a big bang reform. So the argument we were making is this is just a completely unreasonable standard to apply to India,” Subramanian told the global financial think-tank, where he worked before being appointed as India’s Chief Economic Advisor.
In his power-point presentation on the annual Indian budget presented by the Union Finance Minister, Arun Jaitley, he said it focusses on key areas including push for public investment.
“We are pushing growth via public and private investment. It is not coming at the cost of fiscal consolidation. It’s accompanied by an improvement in the quality of fiscal consolidation. So this is a big part of the budget,” he said.
“The impulse to growth has to come in the short run from public investment. And that’s going to depend to a great extent upon implementation capacity in the public sector,” he said.