Needless government interventions detrimental: Economic Survey

The ECA controls the production, supply and distribution of vegetables, pulses, edible oils, sugar etc., which are treated as essential commodities.

Published: 01st February 2020 03:22 AM  |   Last Updated: 01st February 2020 10:40 AM   |  A+A-

K. V. Subramanian,  Chief Economic Advisor with his team during a press conference on Economic Survey 2019-2020 in New Delhi on Friday. (Photo | Shekhar Yadav/EPS)

K. V. Subramanian, Chief Economic Advisor with his team during a press conference on Economic Survey 2019-2020 in New Delhi on Friday. (Photo | Shekhar Yadav/EPS)

By Express News Service

NEW DELHI: “Needless” market interventions by the government have a way of becoming counter-productive to the intended objective, the Economic Survey warned, going on to suggest that “each department and ministry… must systematically examine areas where the government needlessly intervenes and undermines markets”.

Chief Economic Adviser K Subramanian listed four examples of such failures: the “anachronistic” Essential Commodities Act (ECA), Drug Price Control Orders, foodgrain markets and debt waivers.

“The Indian economy is replete with examples where government intervenes even if there is no risk of market failure, and in fact, in some instances its intervention has created market failures,” the Survey noted.

Subramanian was sharply critical of the ECA, holding that with agricultural markets becoming more integrated and competitive, “the utility of the Act is dubious”.

The ECA controls the production, supply and distribution of vegetables, pulses, edible oils, sugar etc., which are treated as essential commodities.

The ECA is ineffective at controlling prices, Survey notes.

Stay up to date on all the latest Nation news with The New Indian Express App. Download now
(Get the news that matters from New Indian Express on WhatsApp. Click this link and hit 'Click to Subscribe'. Follow the instructions after that.)

Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp