After India’s announcement of ‘One Nation, One Market’ in the agricultural sector, Shankkar Aiyar, in the New Indian Express, reflects on the mechanics of policy reforms in India, where problems and solutions for economic growth are known.
"The pandemic may have been the last straw that broke the back of the economy, but it was already suffering from morbidity. Indeed, in its rationale Moody’s says the action “was not driven by the impact of the pandemic. Rather, the pandemic amplifies vulnerabilities in India’s credit profile that were present and building prior to the shock”. Rather ominously, it sees “a prolonged period of slower growth”. The agency observes that the circumstance, level of debt and “persistent stress” in the financial system, challenge policy-making. The pervasive practice of staring at a problem and its solution simultaneously, aka procrastination, has left the economy adrift.
What must be done is known. At the crux is the need for systemic restructure — the government is present in sectors which it must exit and missing in segments it must be present. The Centre does what is best done by the states. This calls for decentralisation of authority and accountability. States need to up their game — modernise land and labour laws, craft clusters for rural and urban growth. Technology is the key to efficiency."
Read full article here