Good economics needs to be supported by good politics: Montek

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SME Times News Bureau | 05 Apr, 2013
Laying emphasis on the need for good economics to complement good politics, Planning Commission Deputy Chairman Montek Singh Ahluwalia Thursday said that no society can have a future without the two and the systems would run down in the absence of a positive balance.

Addressing a gathering at a CII event in New Delhi, Ahluwalia stated that he is a firm believer that good economics can lead to good politics but the path to it is not easy. He further stated that bad policies exist because of vested interests and to address this issue, electorate needs to be adequately informed to understand who is benefiting from policies of the government.

Singh stated that energy pricing as one of the most difficult areas of policy. As India imports majority of its energy needs be it crude oil, natural gas or coal, the domestic price of energy should reflect the imported price. Benefits of such change would only occur over a period of time whereas costs are evident immediately, he said.

Emphasizing the role and importance of institutional participation of business, he urged CII to assess 12th Five Year Plan and bring out 15 potentially controversial things with its views on agreement or disagreement. This according to him will offer a better chance of good sensible economics being complemented by good politics.

Also addressing the forum, Ravi Shankar Prasad, Member of Parliament (Rajya Sabha), Bharatiya Janata Party (BJP), stated good governance is the critical link between good economics and good politics. He emphasized that good economics is imperative for economic growth. He also stated that India has squandered away lot of opportunities focusing on distribution and not on capacity expansion.

Emphasizing on the importance of good governance, he highlighted four contemporary (policy) issues in sectors relating to coal allocation, national highways, real estate and telecom where good policy work failed to deliver desired results due to bad governance.

He urged fellow politicians that the inherent potential of the country is waiting to explode and we have to become facilitators by practicing good economics, good politics and through proper governance and not to be the road blockers.

Also speaking at the forum, T N Ninan, Chief Editor, Business Standard, stated that the economic reforms issue has not really figured adequately in the political framework. He further added that managing the economy well is a necessary but not a sufficient condition for the political parties to bring them back in power.

He also raised the question of good economics for whom. Good economics can lead to good politics is a statement relevant only for urban areas as still the rural population wants the Government to safe guard their interests and not allow free market based discovery of price. Giving examples that farmers want the Government to guarantee a fixed price for their produce and subsidized electricity and fertilizers instead of market driven price.

Chief Minister of Haryana, Bhupinder Singh Hooda, in his address, stated good economics and good politics are the two sides of the same coin and if put together they lead to good governance. Referring to Kautilya, he stated that good economics should be driven by the motto of service and welfare of all sections of the society.