COMMENTARY
INTERVIEWS
SPECIALS
CHAT
ARCHIVES

Economists stress cut in subsidies

Noted economists today strongly advocated a substantial cut in subsidies in low priorities areas and a reduction of revenue deficit by raising consumer charges for power and water.

While making a number of suggestions to reinvigorate the economy and accelerate the growth of output and employment, the economists, in their pre-budget discussion with Finance Minister Yashwant Sinha, also supported market responsive exchange rate policy and other supportive measures to restore dynamism to exports.

Twelve noted economists including Prof A M Khusro, Dr Rakesh Mohan, Prof Arun Kumar, held a marathon meeting with the finance minister and senior officials of the ministry.

Sinha, in his opening remarks, assured the economists that the government would the necessary measures to pull the Indian economy out of the current recessionary phase.

He also underscored the magnitude of the task of raising public sector outlay by enlarging fiscal deficit, which is expected to touch around six per cent of the GDP at the end last financial year.

The minister sought their views on subsidies, the challenges from recent economic crisis in the East Asian countries, exchange rates, and poverty alleviation programmes.

The economists agreed that there is need to improve infrastructure situation in the country and supported any move by the government towards disinvestment and privatisation.

The economists also supported better credit, and research and technology for the development of the agriculture sector. One of suggestions made was to improve savings opportunities by expanding the menu of financial instruments.

They urged the government to revamp public distribution system and cut wasteful subsidies to fertilisers and pesticides.

The economists cautioned the finance minister on the issue of capital account convertibility.

The economists also suggested a substantial increase in public investment, particularly in infrastructure projects with large multiplier effects.

The minister yesterday held a meeting with the representatives of small-scale sector and captains of the industry to ascertain their view on the forthcoming budget.

During his meeting with the representatives of the industry, he expressed concern over the low industrial growth and slow down in the exports. He also highlighted the need to develop quality infrastructural services.

While talking to small-scale industry representatives, Sinha said that the sector need to be more efficient so as to be able to compete at the global level. He lauded the role of the small-scale sector adding it had made enormous contribution to national production, exports and employment.

The economists also suggested more emphasis on education and health for female children and women.

The other economists, who attended the meeting were: Dr V S Vyas, Prof Pravin Visaria, Dr S P Gupta, Prof C D Wadwa, Prof Vikas Chitre, Dr Surjit Bhalla, Prof Ashok Guha, Dr Ajit Singh, and Dr R J Modi.

UNI