New Delhi: Former Chief Economic Advisor Arvind Subramanian speaks to NDTV's Prannoy Roy on a range of issues in front of the Indian economy today. From the bad debt crisis in the banking sector to the growing agrarian distress, the Dr Subramanian weighs in on the good, bad and ugly of Asia's third-largest economy. "The GST design and implementation could've been better," he says. And even though he doesn't go as far as saying that the demonetization was a bad idea, he says, "Demonetisation was meant to be extreme... but if political capital could be better spent I'd suggest that (over demonetisation)".
On the controversy over the independence of the Reserve Bank of India, the former Chief Economic Advisor says 'The RBI's excess capital should go to recapitalise banks and not to the government. Financing government's budget deficit would be raiding RBI."
In a significant warning, he also says that the "RBI's independence is vital and the board should not be politicized."
However, one area where the government deserves praise is the new bankruptcy law, Dr Subramanian says. "Centre, and states should work together on agriculture like they did for GST," he says. He also backs a radical idea: "Farmers should get universal basic income."
Dec 08, 2018 20:52 (IST)
And now the question, will Arvind Subramanian return to Indian? "I miss India very badly. But I live in the present, not past or future," says a cryptic Dr Subramanian.
Dec 08, 2018 20:45 (IST)
"Financing the deficit would be raiding the RBI. But I also ask, why didn't RBI voluntarily say we'll use this to solve bad bank crisis?" Arvind Subramanian says.
Dec 08, 2018 20:43 (IST)
On the critical point of contention - the RBI's reserve - Arvind Subramanian says the central bank's excess capital should be used for banks and not for the government's budget deficit. "There are excess reserves but only for recapitalisation of banks and only if there are bank reforms," he says.
Dec 08, 2018 20:40 (IST)
On the RBI vs government rift, Arvind Subramanian says the central bank is one of most respected institutions in India. "But RBI independence requires cooperation," he says.
Dec 08, 2018 20:40 (IST)
Arvind Subramanian on his meeting with Finance Minister Arun Jaitley on Saturday evening: "I just mentioned to the minister - Is the GST doing well? And budget has made some unreasonable demands 16-17% (of total revenue)."
Dec 08, 2018 20:35 (IST)
But would he recommend demonetisation to any government? After much prodding, Arvind Subramanian gives us this: "If political capital could be better spent I'd suggest that (over demonetisation)."
Dec 08, 2018 20:32 (IST)
Was demonetisation a bad idea? Arvind Subramanian gives us an insider's view. "Demonetisation was meant to be extreme," a diplomatic Dr Subramanian said.
Dec 08, 2018 20:31 (IST)
"We should re-evaluate cow policies," says Arvind Subramanian, when asked about systems that prevent farmers and the rural population from things like selling a dairy cow once it has lived its age.
Dec 08, 2018 20:24 (IST)
Arvind Subramanian says the centre and states should work together on the agriculture sector like they did for GST. And then he backs a radical idea: "Farmers should get universal basic income."
Dec 08, 2018 20:16 (IST)
"There was a delay in acting. IL&FS came out of the blue but where were the regulators?" Arvind Subramanian said.
Dec 08, 2018 20:15 (IST)
So how does he suggest India should handle its bad debt crisis? "My proposal is for a deep dive into NBFCs (Non Banking Financial Companies) and do an AQR or asset quality review," Arvind Subramanian said.