Arvind Subramanian laments lack of reading habits of young generation
Yoshika Sangal | July 21, 2015
Terming the nationalisation of banks in the 1960’s as one of the ‘biggest economic sins’ in the history of India, chief economic advisor, Arvind Subramanian called for establishment of more banks. He was speaking at a talk organized by ‘Ideas for India’, an economics and policy portal.
Subramanian and professor Karthik Muralidharan of University of California spoke on the various economic issues and development policies at India International Centre on Monday evening.
According to him recapitalisation strategies for banks should differentiate among the banks and the sources of finances should be diversified whether they are many banks or types of banks. He also said there is a need for increasing licensing.
He proposed that there should be better bankruptcy laws and creative quasi-political exits mechanisms in banking.
Calling the path of progress a precocious developmental model of the Indian economy, Subramanian said that India is trying to grow and develop by defining its comparative advantage of under-supplied skilled labour than the majority of unskilled ones.
Usually a country’s last stage of development are meant to get capital labour technology and export labour intensive goods, yet it is striking that India has already been exporting a lot of FDI and is doing things at levels of development and income much earlier than other countries and this unique model could be a one that other countries will eventually follow”, he added.
“I strongly believe that institutional development, taxation and fiscal contract between citizens and the government is very important for accountability as the number of tax payers to voters in the economy has been four per cent for very long”, he said while explaining the precocious political model of the country.
“A major challenge for India is that it started as socialism with restricted entry to capitalism without exit. Be it fertiliser, power, banks, public-private partnership projects, civil aviation or even agriculture of rice and sugar, one cannot get out of inefficient production. Also, the export outcome has come down exponentially, yet I am hopeful that increasing demand for education, sights of good economics becoming good politics combined with competitive federalism and reforms like goods and services tax (GST) and jandhan aadhar mobile (JAM) would be agents to an endogenous change in the country”.
On being asked by Muralidharan about investments in infrastructure development, the CEA pointed out that in the latest budget there would be no constraint on spending on public investment but the concern is to spend it judiciously during the short-run.
“It is pivotal to understand ‘how to spend’ and all components of expenditure should be focused with outcomes,” he said.
He felt that “there should be one or two universities of think-tanks in every state that will do essential assessment of the quality of expenditure. If one knows the value of money or lack of value of money then it would be an important input into the first level of decision of what gets financed.”
An event attended mostly attended by students and teachers of economics, Subramanian said that the young generation does not read enough. He quoted German economist Rudi Dornbusch’s advice to American economist Paul Krugman, “just read the Financial Times every day and that will give you an idea on what to research.”
“In order to understand development you need to read economics as well as history, political theory, political science and fiction. The scope of academic work is huge “he added.
After extending timings of shops and restaurants as well as the reopening of cinema halls and theatres under specified SOPs from October 22, in view of the festive cheer, the Maharashtra government has allowed restaurants and eateries to remain open till 12AM and shops and establishments to function till 1
Rubbishing the recently released Global Hunger Index 2021, wherein India has slipped to 101 position to be placed below Pakistan, Nepal and Bangladesh, Arvind Panagariya, professor of economics at Columbia University and former vice chairman, NITI Aayog, has said that data collection and methodologies used
A long life span free from diseases and disability, the so-called healthy aging, has been a matter of prime interest to humanity. It is widely held that the life expectancy is a function of interplay between various genetic and environmental factors. There is scientific evidence to support the fact that on
Defence minister Rajnath Singh’s statement, that Mahatma Gandhi had asked V.D. Savarkar to file a mercy petition before the British, has ignited a debate. Vikram Sampath, a historian and author of a recent biography of Savarkar, says two weeks after Jawaharlal Nehru was lodged in Nabha jail, his
The launch of the Gati Shakti master plan will be a booster dose for India growth story. The plan, as the name indicates, will ensure Gati, i.e., speed and Shakti, i.e., empowerment to the ₹1 trillion national infrastructure pipeline. The plan will break inter-ministerial silos. For examp
Hitting back at the central government in a strongly worded attack, Nationalist Congress Party (NCP) chief Sharad Pawar has said Bhartiya Janata Party is misusing central investigative agencies for political benefits. “Central agencies including ED, CBI and NCB are being used for polit