CHENNAI: Economist and former deputy chairman of the Planning Commission, Montek Singh Ahluwalia said the recent budget presented by the Modi-led BJP government scored well by aiming to reduce the fiscal deficit and focusing on growth spurred by an increase in capital expenditure. Ahluwalia was speaking on ‘Resilience and Reorientation: Tomorrow’s Economy’ at the ThinkEdu Conclave in Chennai on Friday.
In a session chaired by SASTRA university Vice-Chancellor Dr S Vaidhyasubramaniam, Ahluwalia said, “The target of 6.5% growth is good as it is ambitious when the rest of the world is going to be in a bad shape. Most international organisations are predicting positive growth in India, along the 6.1% range.”
He, however, added that the revival of private investment was key for the economy to witness a growth spurt.
Even as there is a significant budget apportioned to creating infrastructure, he pointed out that the role of state governments in earmarking budgets for capital expenditure and the Centre resolving problems of land acquisition are the two red flags that need to be addressed.
In addition to his commentary on the budget, his address bore a note of caution for policymakers and economists who face multiple challenges in a world where many economies are battling volatility.
He urged them to create a bulwark for the agricultural sector to withstand the shocks of climate change.
Drought-proofing the agriculture sector from the impact of unseasonal rains and a patchy monsoon in certain arid regions was a necessary step to protect the economy, he said.