Summary

As Mr. Narendra Modi of the BJP gears up to form the new government, he faces the challenge of jump-starting India’s economy. However, the exact contours of the new government’s economic agenda are yet to be articulated. In this context, ISB’s Bharti Institute of Public Policy joined hands with the Oxford University Press to organise a panel discussion on the ‘Economic Agenda of the Next Government of India’ on May 10 at its Mohali campus.
 
Opening remarks from the organisers was followed by the first panel discussion on The Immediate Fixes and Long-Term Needs of the Indian Economy’. Dr. Ashima Goyal, Professor of Economics, Indira Gandhi Institute of Development Research (IGIDR), Dr. Rajesh Chaddha, Senior Fellow, National Council of Applied Economic Research (NCAER), and Prof. Sisir Debnath, Assistant Professor Economics and Public Policy, ISB were the eminent speakers in the panel, which was moderated by Mr. Subhomoy Bhattacharjee, Deputy Editor, Economic Bureau, Express Group.
 
The speakers provided an in-depth analysis of what the government needs to fix in the long and short term. On the subject of fiscal deficit, Prof. Goyal commented that the government needed to better target subsidies to sections which needed it. Emphasising the need to hold governments accountable, she suggested that there be well-defined metrics to measure outcomes of government policies. In addition, she also spoke about need for reforms in the coal sector as well as administrative reforms. Other issues mentioned by her included the need for states to have better co-ordination and the need for a menu of instruments to increase financial savings to counter inflationary pressures. Prof. Debnath discussed the need for more competitiveness in the export sector. He also emphasised the urgent need for rationalising labour policies which constraints the industrial sector. According to Dr. Chaddha, the next government needed to focus on confidence building measures in governance in the first few months. He suggested that it was important to bring about a blue collar revolution in the manufacturing sector as well as allow FDI in retail. 
 
The discussion in the second panel revolved around an important question ‘Is an Economic “Regime Change” Necessary and Possible?’ Speakers in this panel included Dr. Deepak Lal, James S. Coleman Professor Emeritus, University of California at Los Angeles, Dr. Amir Ullah Khan, President, Glocal University, Saharanpur and Senior Policy Advisor, Gates Foundation and Mr. Subhomoy Bhattacharjee while Prof. Rajesh Chakrabarti, Executive Director, Bharti Institute of Public Policy was the moderator.
 
On the question of the possibility of an economic "regime change”, Prof. Lal opined that it was unlikely given that there was no public discussion about free markets among parties. He stated categorically that India needed a Margaret Thatcher like figure who could clear the country of vested interest. The origin of India’s economic problems, according to him, went back to the British Raj whose policies hobbled the economy. Dr. Khan, on the other hand, wanted to know why the Indian industry was complaining given that they were making profits even in this economy.  He emphasised that along with political dynasties the industrial dynasties also needed to be dismantled. Dr. Khan was of the opinion that free markets do not work unless power is decentralised. However, despite the existence of the 73rd and 74th Constitutional Amendments, there is a tendency to centralise power in India. Lastly, he highlighted the need to change the regulatory system of higher education which penalises good institutions without having the ability to regulate the others.  Mr. Bhattacherjee was optimistic about an economic regime change, since there was a shift in focus towards performance related issues. Giving the example of Mamata Banerjee who was talking about tax reforms in Bengal, he pointed out that political parties which were dynamic enough to understand and respond to the aspirations of the voters were likely to succeed.
 
A question and answer session followed after both sessions with enthusiastic participation from the audience, which had over 70 participants ranging from ISB students to academics, researchers and professionals.