New Delhi: The 30th lecture of the “Lecture Series” organized by the Central Vigilance Commission was delivered by Shri Shaktikanta Das, Member, Finance Commission of India here today on the topic “India Economy – the Structural Question ”.
Shri Shaktikanta Das began his lecture with a discussion of the broad features of the Indian economy since Independence – a mixed economy with the presence of a dominant public sector as well as the presence of private enterprise and centralized economic planning characterized by a system of licences and permits. The positive features of following such a path of economic development were the development of human resources on a large scale, the growth of the public sector and achievement of agricultural self-sufficiency due to the green revolution. The restriction of private enterprise as well as low rates of growth of the economy were identified as structural drawbacks of this period.
He characterized a robust economy as having the following features: existence of sound macro-economic parameters, achievement of inclusive growth and the removal of artificial restrictions and impediments, wherever possible, in an economy. He identified two periods of structural reforms of the economy, viz. in 1991 as well as in 2014-17 as being very significant milestones. The 1991 economic liberalisation was characterized by the ending of industrial licensing and permits, devaluation of currency, reforms of the financial sector including the emergence of SEBI as a market regulator and the rapid growth of sectors such as the telecom sector in India.
He addressed concerns such as the need for correction of the Debt/GDP ratio and the importance of improving the quality of public expenditure. He explained how measures such as the use of the Outcome Budget, the ending of the Vote on Account due to the shifting of the date of the budget, the merger of the Railway Budget with the General Budget and the ending of the distinction between Plan and Non-Plan expenditure were important structural reforms in this process. These measures have had a positive impact on the quality of public expenditure.
The discussion on the 2014-17 structural reforms covered monetary policy reforms (the amendment of the RBI Act and the constitution of the Monetary Policy Committee), Inflation Targeting, FDI policy reforms including the increase of Sectoral caps for foreign investment and the abolition of the FIPB, the ongoing banking sector reforms, taxation reforms and the implementation of the GST as well as Demonetization as a means to target the parallel economy.
The lecture was followed by a question and answer session.
Full time and part time CVOs based in Delhi/NCR attended the lecture along with CMDs, Board of Directors and other officers of the vigilance administration. The CVC Lectures may be viewed online through NIC on the link: http://webcast.gov.in/cvc/. The web page link is also available on www.cvc.nic.in.
