Economic slowdown cyclical in nature, not structural: CEA Subramanian
Chief adviser Krishnamurthy Subramanian on Monday said India’s economic downturn is more cyclical than structural in nature, and the government has a well-thought-out agenda for reforms to revive the economy.
“The present slowdown is much more on the cyclical side. The steps we are taking, like the corporate tax rate decrease, are meant to produce a more favourable environment for investments that are required for continuing growth,” Subramanian said in the FICCI Young Leaders Summit, adding that personal investment is an integral driver of economic growth and consumption is a force multiplier.
Subramanian acknowledged that the country’s economy is facing a downturn, however, said the nature of it should be gauged by estimating the possible growth rate of the market. “If the growth potential has changed due to some structural facets of the economy, then you can say that the downturn is structural,” Subramanian added.
Although the government has announced a slew of steps over the last four months to improve growth and improve consumption, the steps are to yield the desired benefits.
The advisor said there has been no shift in demand the demographics, and the capacity of companies to supply. “The government is presently doing a lot of reforms, and reforms improve the productivity of the economy. We are taking all the measures that are essential,” Subramanian said.
Subramanian also talked about the importance of handling information. “Data is of the people, by the people, and hence, should be for the individuals,” he explained. The authorities should also foster the use of infrastructure such as information infrastructure,” he added.
On Saturday, fund ministry Nirmala Sitharaman had stated there was need to ensure credibility in government data, while adding that the government holds back data only.
“We need to guarantee people who want the information and lots of individuals need the information… Even the government needs its own data. However, the simple fact is when occasionally something real has gone wrong in the floor, and so, survey results have been held back,” she’d said at the Hindustan Times Leadership Summit 2019 at New Delhi.
The authorities is captured of the ongoing debate about its credibility and data, the minister had added.