CHENNAI: “We cannot have morality exclusively dictating public policy,” said Arvind Subramanian, Chief Economic Adviser to the Government of India, on Saturday. Speaking on the Union Budget 2018-19 organised by Chennai International Centre at the Madras School of Economics campus, he emphasised that it was important to ensure that morality did not completely influence policy decisions.
At the talk which was moderated by V Anantha Nageswaran, economist and author, Subramanian said “As a society, we need a more subtle nuanced view on morality. Just as we have morality that influences policy making, another ethic we hold very dearly are Small and Medium Enterprises (SMEs). Even in advanced countries, there is a thrust to promote SMEs but there is a push to make small companies become big. This worshipping of small companies has to translate into big companies.”
Speaking of the Non-Performing Assets (NPA) problem, Subramanian said it was important to have a better internal mechanisms in place to assess risk.
“The ability to assess risks in public sector banks is not as good as it is in the private sector,” he said. “The inability to have the pool of resources that the private sector has is impacting the public sector.”
When it came to jobs, he said there was no one clear strategy that could be adopted to create jobs. He said the focus should be on keeping up high rates of investment and growth while also targeting labour intensive sectors. “There were three sectors that did well during the years where we saw a boom — IT, agriculture and construction,” said Subramanian. “If we can revive the real estate and construction sectors which have suffered because of policy experiments, it will really help in job creation as the sector is one of the largest employers.”
On agriculture, he highlighted that agriculture should be a top priority. He also spoke of how there was a long way to go in terms of Research and Development in the sector too.
“We need a lot more R&D in agriculture and it should not be prevented through regulation” he said. “I was shocked when I found out that after 70 years of Independence, only 45 per cent of agricultural land in India is irrigated. The rest is rain fed.”