Getting investment in the infrastructure sector and bankruptcy reforms are the two issues which are on the top of the government’s agenda, Economic Affairs Secretary Subhash Chandra Garg has said.
Noting that India has no such framework for dissolving bankrupt and insolvent units, he said that the reform in this sector would bring in a state-of-the-art kind of system which works on strict and stringent timelines.
“My focus will be on what can make a bigger contribution to India’s economic growth and macroeconomic management,” Garg said.
He said that, going forward India will have to do a lot more in the infrastructure sector, as investment in this sector can meet India’s growing aspiration for a better economy, for a better life and better management.
“So, to my mind one of the biggest policy priorities is to increase investments, get investment in infrastructure. That story is very very important,” he said, while detailing about his priorities.
Unfolding of the bankruptcy reforms is another area top on his agenda.
“The other thing which you look very keenly to see how it unfolds is the new regime of bankruptcy reforms,” he said.
Resolving insolvency and broken funds would help the banking sector to improve its performance, Garg said. “Whatever hit it takes, it takes, but the going entity becomes a better economic contributor than otherwise,” he said, adding that going forward, these would be the two big areas “we will look for”.
He also said that the massive need in India is to make it a formal economy, a less cash economy, improving based on transactions that those are the areas where (we will work).
To a question on differences in perception by analysts back home about the Indian economy and by top officials of the International Monetary Fund and the World Bank, Garg said the commentators in India seems to be “far more influenced by short term outcomes”, whereas people at the IMF and the World Bank take more of a long-term view, try to evaluate the real implications of such bold big reform initiatives.
“They also make a sort of relative view about how others are doing, whereas in India commentators seem to be more focused about India-specific implications.
“Almost universally without exception there is a great appreciation for the kind of structural reform which India has done and the kind of changes which is to make India’s economic performance going forward, Garg said.
Asked about the Universal Basic Income or UBI, which appeared prominently in the IMF’s latest fiscal monitor report and a microsimulation case study, he said it is an idea which India has looked at very closely.
He said that the UBI is an idea, which many economic thinkers are promoting as a measure of social security in an economy or in a world where technological development and otherwise are reducing traditional jobs.
“It is an idea which we have also looked at very closely,” he said, adding that in a way programmes like Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) are “kind of” UBI, which also applies test of work rather than a dole.
“Whether a design like MNREGA is a better design for a basic income is something which we need to examine going forward,” Garg said. There was a big analysis in the economic survey about the big basic scheme of schemes, he said, noting that these are the ideas which always remain under examination.