Experts share their views on economy at Sonipat conclave
India should focus on supply through reforms and capital expenditure to create assets in the economy, said Dr. K.V. Subramanian, the Government’s Chief Economic Adviser, highlighting the three decades of 1991 economic reforms at the 3rd Global Finance Conclave organised by the Jindal School of Banking & Finance (JSBF) in Sonipat on 12 Nov 2021.
“Recognising that the COVID pandemic requires social distancing and lockdowns, it was obvious that not only would there be a demand side impact, but disruptions of the supply line chains too. While demand can actually be pushed up faster, it takes at least eight to 10 months for supply to increase,” he said of the challenges faced during the pandemic.
“What India has done during this crisis, and I hope this will become an important macro-economic template that other countries and policymakers should study in terms of the policy response, is that we actually focused on the supply side, whether it is through the reforms or the capital expenditure.
“If you have an aggregate supply line not changing, you only have increasing demand. In macroeconomic terms, it means there will be a path to growth but inflation will go up as well.
“When inflation goes up, monetary policy has to try and unwind that demand. What you have then is the increase in demand that the fiscal policy did and the monetary policy tries to unwind it. So, you come back to square one, that push to growth that you got is a temporary one because monetary policy and fiscal policy work at cross purposes,” said Dr. Subramanian.
The conclave “India’s Growth Story from 1991 To 2021, And Beyond” commemorated 30 years of the transformative reforms that were initiated in 1991. It was also to understand the challenges that need to be addressed as India slowly comes out of a pandemic.
Delivering the Presidential address at the conclave, Dr. Shankar Acharya, Former Chief Economic Adviser and author of ‘An Economist at Home and Abroad’, pointed out that the once-in-century pandemic has had a major impact on the Indian economy.
“All indices like the GDP, unemployment, female participation in the labour force, fiscal deficit and debt were impacted. Lockdowns became a common policy during this time. This led to income and consumption losses creating a high vulnerability among the poorer sections of India. There will, however, be economic recovery even though there is still a high level of uncertainty due to the pandemic,” he said.
“The biggest impact has been on a non-agricultural informal sector. There have been significant policy initiatives over the last two years and they are a step in the right direction. If the effects of Covid-19 and other constraints on our medium term growth performance outweigh the reform intention, then it may lead to a period of modest growth over the next five years,” said Dr. Acharya.
Professor (Dr.) C. Raj Kumar, Founding Vice-Chancellor of O.P. Jindal Global University (JGU) recapped, “The 1991 economic reforms created a new vision for India which not only impacted the economic sector and the society at large but it also created new opportunities for institution building. The idea of private higher education institutions with a view to improve the quality of education and promoting excellence is an outcome of the idea whose time had come.
“The reality was that though India has historically contributed to knowledge society globally, the contemporary evolution of Indian education at the dawn of Independence was limited.
“We only had 20 universities and today we have over 1,000 universities and over 50,000 colleges. We strongly believe that there are critical elements to improving the quality of governance to improve higher education. This includes commitment to internationalization, advancing research, interdisciplinary learning, high quality faculty and equitable access to education for all.
“The economic reforms of 1991 that were ushered in the country led to other forms of reforms that further shaped the socio-economic future of India. Today, the National Education Policy 2020 has enormous implications with the potential of reimagining the future of Indian universities, creating an intellectual, political and social consciousness and political impetus for the improvement of higher education,” he said in his inaugural address at the conclave.
Dr. Ashish Bhardwaj, Professor & Dean, Jindal School of Business and Finance, added, “The reforms of the 1990s changed the grammar of our country and the confidence of our people forever.
“Since the historic developments that happened 30 years, there is a need to reflect on the implications of India’s growth story from 1991 to 2021 and beyond.
“Understanding where we came from and how we emerged, will help us understand where to go from here and how to get there. Answers to these tough questions will emerge from deliberations in the conclave.
“To a large extent, the fate of the world will depend on what India decides to do, how fast we do it, and how quickly we learn the lessons of the past,” said Dr Bhardwaj. #economy #investment /fiinews.com
