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Last updated: 18 Dec, 2018  

India.Growth.9.Thmb.jpg Fresh prescription for a healthy economy

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Bikky Khosla | 18 Dec, 2018

Amid rising debates over agrarian and job crises, which have emerged as a major concern in 2018, a group of 13 economists from academia came out last week with a concise strategy paper, which not only sheds valuable light on these burning issues but also on all other major concerns currently facing the Indian economy. The suggestions, offered by these renowned economists -- each with different specializations and interests – are definitely worth considering.

The first among the suggestions is on importance of maintaining macroeconomic stability, which, according to the report, has at least three elements to it: maintaining low and stable inflation, keeping fiscal deficit under control and ensuring that the current account deficit can be financed largely through stable capital inflows. Every time macro stability has been traded off to boost growth, the economy has been pushed towards a crisis, the report reminds. So, blindly driving after growth may prove fatal.

On agriculture, the report calls for reform in agricultural and land policies, instead of propping the sector up through repeated sops. On infrastructure, it suggests several steps for accelerating the pace of the infrastructure build-out. Similarly, there are a number of recommendations for empowering the power sector and improving the underlying competitiveness of the export sector. On the financial sector, it voices for cleaning up of bank balance sheets and improvement in management at the PSU banks. All these suggestions sound solid.

And the last but not the lease, the report stresses the importance of making growth inclusive and sustainable. It highlights the importance of enabling the education system to deliver universal functional literacy, dealing with the skill shortage, increasing participation of women in labour force, improving the healthcare system, addressing environmental issues, and replacing the present social protection mechanism with a more robust one. Of course, these are long-term measures, but the earlier we start, the better it is for us.

I invite your opinions.

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