KOCHI: The Chinese model of economic growth has become obsolete and if India can get its act together in the next six months, we can overtake China in three to four years, said economist and BJP MP Subramanian Swamy.
“India has an opportunity to become a developed country and challenge the US economy by 2050, but we have to improve our infrastructure facilities and multiple complex tax system. As we have demand problems, we should empower people to have a greater purchasing power. The recent decision of the Union Government to give concessions to the corporate sector is wrong. Instead, we should abolish personal income tax, which has become a nightmare for most people,” he said while addressing young entrepreneurs at the valedictory meet of TiEcon Kerala entrepreneurship meet at Le Meridian Convention Centre here on Saturday.
The government has set a target of growing the country into a $5-trillion economy by 2024. To achieve the target, we have to grow at the rate of 14.4 per cent per year. But our growth rate is barely 6 per cent now. No Prime Minister after Narasimha Rao has brought radical changes in the economy. The BJP government has focused on microeconomic projects like rural electrification and toilets. If we want to address our problems like unemployment and lifting the majority of the population from below the poverty line, we need macroeconomic projects, said Swamy.
According to him, India has the potential to grow at 10 per cent for the next 10 years to become a developed country. “Unless we recognise it is a macroeconomic system and facilitate interactions and interlinks between the industry and various systems of the economy, we will continue the mistakes we have been committing,” said Swamy.
India should raise resources through auctioning of spectrum and coal blocks. There are many sectors where we are not pricing our products according to the market. India’s agricultural pricing is much lower than Japan and the US. We should ensure that the rate of interest on fixed deposit is raised to 9 per cent. Interest on loans should not be more than 9 per cent. If we do this, funds will start flowing and the economy will revive, he said.
Criticising the policies of RBI former governor Reghuram Rajan, Subramanian Swamy said Rajan kept on raising the interest rates on the plea that inflation was pushing hard, we have to control money supply. But the rising interest rate led to the collapse of the small and medium industries.