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Wednesday, August 3, 2011
INDIAN ECONOMY: Policy paralysis led to economic slump!
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The New Indian Express / Last Updated: 03 Aug 2011 02:42:47 AM IST.
The prime minister’s Economic Advisory Council has hit the nail on the head when it said procrastination and policy paralysis at the government level will hit the economic development of the country. If the economic outlook for 2011-12 presented by council chairman C Rangarajan appears bleak, the UPA government has only itself to blame. As the document pointed out, the government has not been able to take advantage of the mandate it received in the 2009 elections and the political stability that ensued. The reason is not far to seek — the government simply lost its sense of direction, busy as it has been facing charges of spewing mega scams like 2G and Adarsh.
Unlike many economies in the West and south-east Asia, Indian economy has, by and large, been able to rebound from the financial crisis. This should have helped it to achieve better growth rates than any other country, including China. Far from that, it faces an uphill task in achieving even the modest target of 8.2 per cent it has set for itself this fiscal. That the economic reforms have lost their momentum is mainly to blame. Instead of evolving robust economic policies, it has been relying on the RBI to adjust bank rates — 11 times in a year — to end the inflationary pressures on the economy, though with little success.