Stressing that reforms are necessary to improve effeminacy and productivity of the system, former Reserve bank Governor C Rangarajan on Friday said the timing of implementing them is also important as they tend to attract criticism sometimes.
His remarks came days after the NDA Government repealed the three contentious agricultural laws following protests by farmers for over a year.
Speaking on “Three Decades of Economic Reforms in India” as part of a special lecture series organized by Icfai Business School (IBS) Mr Rangarajan said several reforms were introduced in 1991 in the “shadow of crisis” then.
“Reforms do attract criticism. It is not new. Even in 1991 there were critics. There were people in the Parliament who thought that we have sold ourselves to IMF or something like that…Several of those reforms could be introduced in 1991 under the shadow of crisis,” he said.
“Now we can't do that. Therefore we need more discussion. We need consensus building. Therefore as we move ahead with the reforms, lot more consensus with all the stakeholders will be required. So timing and sequencing is also important,” the former chairman of Prime Minister's Economic Advisory Council (PMEAC) said.
Citing an example on timing to introduce reforms, he said labour reforms are best introduced at the time when economy is booming.
Noting that the Centre and states must join hands in introducing reforms, Mr Rangarajan said all sectors including agricultural marketing also require reforms and the government should weigh how to introduce them with what degree of consent.
“Normally reforms create an atmosphere of good climate for investments. The very purpose of reform is to improve the productivity and efficiency of the system,” he pointed out.
According to Mr Rangarajan, India needs to grow at 9 per cent per annum for five years in order to become a USD five trillion economy.
He said the per capita Income of India and China ( in Dollar terms) was more or less at the same level during 1980 and by 2020 the same tilted towards the neighbourng country by 5.5 times.
