Krishnamurthy Subramanian’s comment on economic priorities comes ahead of policy framework review.
Chief Economic Advisor (CEA) Krishnamurthy Subramanian said on Saturday that the country requires growth at this juncture, even with economic trade-offs, as it aspires to increase its dominance and self- reliance in the global economy.
Dr. Subramanian’s comment comes ahead of the revision of policy framework and inflation targets for the Monetary Policy Committee (MPC) headed by the RBI Governor by March 31.
Inflation target review
It would be the first review for the Reserve Bank of India since it was tasked with a mandated inflation target of 4% with a 2% deviation in either direction in June 2016, when it adopted a flexible inflation targeting model.
“At this juncture we must focus on growth and when it comes to pressures for trade-offs, we must be leaning on growth,” Dr. Subramanian said at a virtual annual regional meeting of the CII, Eastern Region.
Speaking about realising ‘Atmanirbhar Bharat’, the CEA said the private sector had to get back to “Shubh Labh” (ethical profit) and refrain from profiteering.
He gave examples from healthcare studies for Auyushman Bharat where it was found that the rates of the private sector hospitals were 6-7 times higher than those run by the government and that readmission rates in them were also higher.
Dr. Subramanian also called for a change in the mindset on how to increase the pie of government taxes instead of seeking its reduction across sectors.
He said the cycle of private sector investment would begin though there was a lag and to support it, government spending in capex was necessary. The government had already begun it and it would trigger private investment, the CEA added.
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