BENGALURU: Economist and former deputy chairman of Planning Commission Montek Singh Ahluwalia has said that it would take a few years for India to try to get to 8% growth and a structural transformation of its economy needs to be brought about to achieve that.
“The important thing is: ‘Are we willing to do what is necessary?’ That is difficult. What’s happening is we are conducting discussions based on slogans... what we are not saying is ‘what specifically we are willing to do?’” he told TNIE on the sidelines of the four-day ‘Invest Karnataka 2025’ event that kicked off in Bengaluru on Tuesday evening.
Speaking at a session, ‘Resilient Pathways: Charting India’s Economic Growth Amid Global Challenges’, he said as part of the structural transformation of the economy “some sectors will get phased out, and some businesses will get phased out.”
India is running too high a trade deficit: Montek
“Some states will have to change what they do in order to benefit from what is now possible, and this is not well understood,” Montek Ahluwalia said.
He suggested seriously considering cutting down many of the larger states into two or three. “If you did that, instantly there would be a political willingness to create three new good cities,” the economist said.
Ahluwalia said India is running too high a trade deficit which is a serious destabilising factor in the economy and it should be taken seriously.
On imports from China, he said, “The general idea that somehow our balance of payments suggests that we must not import from China. I don’t think this is correct; and actually, if your balance of payments deficit overall is a problem, then quite frankly macroeconomics suggests that you should just reduce the level of absorption domestically, because the overall balance of payments just reflects the excess of demand over available domestic supply.”