The CEA also said it will be only investment and not consumption that will help the economy grow, explaining that the latter boosts an economy with a higher per capita income of say $10,000 or more
Chief economic advisor K Subramanian Wednesday called for a “mindset change” in the private sector by desisting from the tendency to grab profit and socialise losses and also seek sops in times of stress. He also said it will be only investment and not consumption that will help the economy grow, explaining that the latter boosts an economy with a higher per capita income of say $10,000 or more.
The comments come amidst increasing criticism both from the corporate world as well as by analysts and economists outside the government about the issues plaguing the economy, and many a sector like the auto sending SoSes for help.
Comparing the private sector, which benefited the most from the 1991 reforms, to a grown-up man, he said, “this 30- year-old man and must start to stand on his own feet. This adult cannot keep asking his father for help and live with the idea of personalsing profit and socializing losses.” “We need to move on; we’re a market economy, where assets do get reallocated when someone doesn’t manage it well,” he told an event organised by Jana Small Finance Bank this evening. Pointing to an op-ed article by fellow economist Arvind Panagariya about the current economic situation, he sought to drive the point of motivations while the private sector makes pleas for help and called for the need to inculcate “good habits” in the private sector.
Meanwhile, in a different take on what should drive economic growth, Subramanian pitched for a move away from consumption which has fuelled growth for the last decade and refocus on investment which has been falling for the six to seven years.