Arvind Panagariya, Professor, Columbia University & Former Vice Chairman, NITI Aayog was the guest in the latest digital edition of Off the Cuff.
In a conversation with ThePrint’s Editor in chief Shekhar Gupta, Panagariya shared his assessment of the Indian economy and the government’s tackling of the pandemic.
Panagariya said that the weak financial sector will weigh on the recovery of the Indian economy. He pointed out that the Indian economy can grow at a rate of 10 per cent annually for the next 2 decades after the pandemic but added that the continuation of the current policy of import substitution will adversely hurt growth rates by atleast 2 percentage points.
Trade liberalization, labour market reforms and privatization of state-run banks are the three reforms that the Narendra Modi government should undertake, he said adding that this government has undertaken many reforms like the insolvency and bankruptcy code, goods and services tax among others.
He pointed out that a pile up in inventories may be the time for a demand stimulus and lauded the government for its response to the pandemic so far.
Panagariya also said that he now supports the government’s move to not become a part of RCEP or the Regional Comprehensive Economic Partnership Agreement pointing out that China could have used this route to hurt India.