THE HINDU EDITORIAL

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Economic encomium: On the Finance Ministry’s 10-year review of the economy

A glowing 10-year report card must not stoke complacency on what remains undone

Now that the twin-balance sheet problem inherited from the UPA days has turned into an ‘advantage’, as the review stresses, it must translate into a wider private investment revival. That would hinge on a broad-based consumption rebound rather than the K-shaped recovery the government vehemently dismisses. Four years of 7%-plus growth, post-pandemic, would be commendable indeed. However, India needs to grow faster to create jobs at the scale its youth need and ensure that a rising growth tide lifts most boats, if not all. The review expects an ‘all-inclusive welfare approach’ to help enlarge the consumption base by expanding the middle class. But those dependent on handouts, such as the 800 million that need free food by the Centre’s reckoning, must progressively shrink for growth to be meaningful and equitable. The report rightly mentions reforms in learning outcomes, health, easier compliances for smaller firms, as priorities, with some critical changes at the ‘sub-national government’ level to accelerate growth. It is also essential that flaws in reforms such as GST are fixed and some of the blunt policy tools deployed, for instance, import licences and price controls on deregulated products, that send convoluted signals about India’s ‘open market with predictable policies’ pitch, are reconsidered.