The Indian government has not given adequate focus over the past several decades on the creation of public goods, said the Chief Economic Advisor Krishnamurthy Subramanian on November 18.
Speaking at the CII Global Economic Policy Summit 2021, Subramanian said, "In the last seven decades, the Indian government has often done far more of what it should not do, and has not done what it should be doing, which is, creation of public goods hasn't been focused on enough."
The government should not think of public goods as only those that enable human capital such as healthcare and education, but also needs to think in terms of physical and digital public goods, according to the advisor.
Commenting on the government’s vision outlined for the country, Subramanian said, "Recognition of growth at the macroeconomic level has to be the objective that we pursue, together with the efficiency of welfare programs and job creation."
Recognition of the private sector’s role to provide economically optimal level of activities is also an important part of the vision, he added.
Hailing the government’s Production Linked Incentive (PLI) scheme, Subramanian said, "The important aspect of the PLI scheme is that it incentivises growth. PLI is more than a democratised subsidy, it’s directed towards growth, thus incentivising firms to get closer to optimising scale."
Also speaking at the Summit, Rakesh Mohan, a part-time member of the Prime Minister’s Economic Advisory Council, called for the third-generation economic reforms to reboot the Indian economy.
"It’s time for India to initiate the third generation of economic reforms; leapfrog its growth trajectory to next level of around 8-9 percent which is needed to ensure doubling of per-capita income in coming decades," Mohan said while seeking increase in non-agriculture employment generation.
"The key Indian development failure right through the pre- and post-independence history has been the lack of adequate attention to nutrition, health and education of the population. And this is hampering the employability of new entrants to the labour force as new economic activities require an increasing level of educational competence and increasing levels of health," said Mohan.
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