By Gauri Naik
Dec 10 2021: Former Reserve Bank Governor C Rangarajan said on Friday that while reforms are required to improve the system's effeminacy and productivity, the timing of their implementation is also critical because they occasionally attract criticism. His comments come only days after the NDA government abolished three key agriculture legislation after a year of farmer protests.
Rangarajan claimed various reforms were adopted in 1991 in the "shadow of crisis" as part of a special lecture series held by Icfai Business School (IBS) on "Three Decades of Economic Reforms in India."
Reforms are not without their detractors. It isn't a new concept. There were criticisms even in 1991. Some members of Parliament believed we had sold ourselves to the IMF or something similar... Several of these measures may be implemented in 1991 under the guise of a crisis, according to him.
"We won't be able to accomplish it now." As a result, more debate is required. We need to reach an agreement. As a result, as we move forward with the reforms, we will need a lot more consensus from all parties. As a result, the former head of the Prime Minister's Economic Advisory Council (PMEAC) believes that time and sequencing are crucial.
He gave an example of when to initiate reforms, saying that labour reforms are best implemented while the economy is growing.
Rangarajan noted that the federal government and states must work together to implement changes, and that all sectors, including agriculture markets, require reforms, and that the government should consider how to do so with the greatest degree of cooperation.
"In most cases, reforms generate a favourable investment climate. "The whole goal of reform is to improve the system's productivity and efficiency," he said.
According to Rangarajan, India has to expand at a rate of 9% per year over the next five years in order to reach a GDP of $5 trillion.
He said that in 1980, India and China had around the same per capita income (in dollar terms), but that by 2020, the ratio had shifted 5.5 times in favour of the neighbouring country.
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