Left Menu
Development News Edition

Finance commission chief calls reforms for macroeconomic stability

Devdiscourse News Desk | New Delhi | Updated: 17-05-2019 19:53 IST | Created: 17-05-2019 13:31 IST
Finance commission chief calls reforms for macroeconomic stability
Macroeconomic stability is one of the things that will guide India's high growth trajectory, he said at an event organised by Assocham here. Image Credit: Flickr

Expressing concern over muted private investments, 15th Finance Commission chairman N K Singh Friday said in order to push economic growth, the new government should take on the challenge of introducing reforms in areas including land and labour. He also noted that fiscal rectitude is an important intergradient in sustaining long term economic growth and is the core of long term macroeconomic stability.

Macroeconomic stability is one of the things that will guide India's high growth trajectory, he said at an event organised by Assocham here. On the reforms front, Singh said "one single thing that we could not reform was factors of production -- labour, land and capital. We were unable to achieve success on reforming factors of production."

Labour laws remain extremely complicated and there is a need to bring reform by revisiting some of the issues like long term contracts and dispute resolution, he said. Besides, there is a need to visit the area of cost, procedure and processes of land acquisition, he said and added that the cost of capital remains high which needs to come down so that business become globally competitive.

"The fact that our economy is not competitive is ... connected with the inability of successive governments to be able to take on this difficult challenge. In terms of the wishlist for any new government, it would be that in this first year in office will they look to this...it needs political will". "That is why I think the sagacity of the Indian people to elect strong, stable government will be one of the important factors which will bring reform in some of the factors of production," he added.

With regard to high debt-to-GDP ratio, he said, this ratio is misaligned with other peer group countries. The effort of the government is to bring this down and both centre and state governments are well on track to bring the debt-GDP ratio to a prescribed level, he added.

He also said the Fiscal Responsibility and Budget Management (FRBM) Committee 2017, has suggested bringing down the debt-to-GDP ratio to 60 per cent by 2024-25. The FRBM committee, which was headed by Singh, also recommended that the states should bring down their debt-to-GDP ratio to 20 per cent by the same period.

Central government debt is estimated at 48.9 per cent as a percentage of GDP for 2018-19. It is expected that Central government liabilities will come down to 47.3 per cent of GDP this fiscal, as per Budget 2019-20. The outstanding liabilities of the state governments stand at 23.4 per cent of Gross State Domestic Product (GSDP) at end-March 2017, with a range of 46.3 per cent in Punjab and 15.1 per cent in Chhattisgarh, as per an RBI study on state budgets.


TRENDING

OPINION / BLOG / INTERVIEW

Domestic seafood trade in focus as COVID-19 changes market dynamics

As predicted earlier in a report titled Seafood industry post-COVID 19 An overhaul to trigger the growth of small fisheries, one of the changes going ahead would be increased focus on domestic seafood trade, driven by falling exports and su...

Migration post-COVID 19: Taking cues from the past to rebuild economies

Migrants are an irreplaceable part of even the essential workforce of developed countries and are on the frontline in the fight against the crisis, making an immeasurable contribution to saving the lives of natives with voting rights....

Socialization Post-COVID-19: Local associations and online groups to play crucial role

Though every age group is suffering due to the global lockdown caused by the ensuing COVID-19 pandemic, the challenges before adolescents are unique. Their social space has shrunk drastically, besides, they have become highly vulnerable to ...

Pharma post-COVID 19: Reducing political clout can alter business models

Powerful governments that have historically supported the pharma industry in enforcing global intellectual property rules are changing course and introducing legislation that can override normal patent rights during emergencies....

Videos

Latest News

UK's Sunak authorises bailout to rescue strategically important companies

British Finance Minister Rishi Sunak has authorised a bailout plan to rescue companies that are seen as strategically important, with the Treasury saying it may step in to support crucial businesses on a last resort basis after other option...

Australia's most populous state braces for travel chaos as schools, offices reopen

Australias most populous state on Monday deployed hundreds of crowd control staff to enforce social distancing on public transport amid an expected commuter surge as schools and offices reopened and coronavirus cases fell. Australia has rep...

Australia won't make 'wholesale changes' to wage subsidies - treasurer

Australia has no plans to make wholesale changes to its coronavirus wage subsidy scheme, after reporting errors revised the total cost estimates to the programme by around A60 billion 40 billion, the countrys treasurer said on Monday. Austr...

U.S. court rules Florida cannot force felons to pay fees before voting

A U.S. judge ruled on Sunday that the state of Florida cannot force felons to pay legal fines and other fees before allowing them to register to vote.The ruling, for now, clears the way for potentially hundreds of thousands of citizens to r...

Give Feedback