New Delhi, May 26 (IANS) India’s economic growth did not pick up as much as people expected as a result of government action, the government’s Chief Economic Adviser Arvind Subramanian said on Tuesday.
Reeling out facts and figures on the performance of the NDA government during its first year, Subramanian told reporters here that people were judging the rulers by outcome and not effort.
“Going forward, people will judge us on economic growth, which will be the focus of our next course of action,” he said.
Admitting that the controversy over the Minimum Alternative Tax (MAT) had hurt the government’s image, the adviser said it would not be imposed again as the government has learnt from its mistake.
Observing that the government could have done much more in its first year, Subramanian said the number of stuck projects was coming down but there was not much pick-up in new projects.
“In one year, more could have been done but I think structural reforms agenda has been substantial.Reduction in corruption is visible, as evident from a clean and transparent auction of coal and spectrum; liberalisation of gold import regime, and reducing rents intrinsic to quantitative restrictions,” he said.
Achievements during the year gone by included cooperative and competitive federalism by adopting the 14th Finance Commission’s recommendations and creating Niti Aayog in place of Planning Commission, he said.
“The government is close to securing political agreement to launch the game-changing Goods and Services Taxes (GST) regime from next fiscal,” he said.
Referring to the creation of 150 million Pradhan Mantri Jan Dhan accounts since August 2014 for financial inclusion, he said similarly initiating a comprehensive social security through pension, life insurance and accident schemes reflected the government’s commitment to growth with equity.
“As the macro-economic situation has seen a massive turnaround, more can be done in the next 18 months, while ‘Make in India’ will be a long-term strategy to make the country’s economy competitive,” he said.
Noting that structural reforms would take time to influence growth, the former IMF economist said that policy support was crucial over short run, especially for consumption and public and private investments.
On the flip side, private investment continued to be weak as a legacy of the boom period, while declining exports was a cause for concern, as merchandise trade was yet to recover.
“We also need to find ways of relieving the distress in rural incomes. MNREGA, crop insurance, minimum support price will help improve farmers’ income,” Subramanian noted.
He cautioned that interest rate cuts in China and elsewhere would make Indian exports and manufacturing uncompetitive.