In an exclusive interview with Business Standard, former Reserve Bank Governor D Subbarao explained why doubling the economy in 4 years might be too ambitious.
After a 7% economic contraction in 2020-21 financial year, India is eyeing over 9% growth in FY22. However, with extreme job losses, migration of labour from high-productive to low-productive jobs, and high inflation, policy makers may have to rethink the target of a $5-trillion economy by 2025. In an interview with Nikita Vashisht, former Reserve Bank Governor D Subbarao explained why doubling the economy in 4 years might be too ambitious. Highlights of the Q&A:
What’s the state of the economy as we are coming out of the second Covid wave?
• Economy contracted by 7.3% last year, estimated to grow 9.5-10% in FY22
• V-shaped recovery only in technical sense
• Growth lower than what it would have been if there was no pandemic
• Income loss is distressing, especially in a country like India
• Pandemic has left (economic) scars; need to be sensitive about them
How do we bridge the inequality gap?
• Need to generate employment
• Labour shifting from manufacturing to low-productivity agri sector
• The reverse should have been happening
Will 'Atmanirbhar' package be enough?
• Atmanirbhar package a wide canvas
• But it’s not a solution to the employment problem
• Employment issue worsening; need to enhance skills
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