Redesigning India’s ailing data system
R.B. Barman | Former chairman, National Statistical Commission
The Hindu
Barman argues that the new series of GDP figures, with 2011-12 as the base year and released in 2015, has “not gone down well with analysts”. Similarly, withholding data on employment and consumption expenditure is adding to a sense of unease regarding official data.
Official statistics, giving information about the state of the economy and the success of governance “is a public good” and therefore should be “independent to be impartial”, he writes.
Barman also notes that “approach for collection of data remains largely the same for long” and the process needs “modernisation using technology”. He adds that along with GDP, data should “assess competitiveness, inclusive growth, fourth generation biotechnology” etc. Thus, GDP data needs “to be linked with a host of other data for deeper insight”.
According to Barman, the “present national accounting and analytical framework misses out on many important dimensions of the economy”. He writes that we need a new framework for analysing our “complex system and evolutionary process”. He concludes by saying that “data is the new oil in the modern networked economy in pursuit of socio-economic development”.
The deficit bogey
Soumya Kanti Ghosh | Chief economic advisor, State Bank of India
The Indian Express
Ghosh writes that the recent economic slowdown has “complicated the Budget-making exercise”. He states this Budget “could make a substantial difference by challenging the conventional wisdom that does not stand the test of scrutiny”.
According to Ghosh, “the government must not target a number in FY21 that is not credible and achievable”.
He highlights three options in front of the government. One is the “apparent” trade-off between tax concessions and “giving a fillip” to the rural economy. Ghosh argues that while many would argue against the concessions, since only four per cent of the population pay income tax, the Indian economy expanded to almost eight per cent on average during 2004-08 when only two per cent of the people were paying tax.
Second, he writes, the idea of a “rural push” through PM-KISAN scheme is understandable but “all efforts must first be made to cover all farmers under the scheme”.
Third, the government must think about the “trade-off between tax adjustment and incentivising savings”.
Aside from all these, Ghosh writes that the Budget should also work towards restoring trust in financial institutions.
Natural farming for fiscal prudence?
Arunabha Ghosh | CEO, Council on Energy, Environment and Water
Niti Gupta | Research analyst, Council on Energy, Environment and Water
Business Standard
Ghosh and Gupta call for a shift towards sustainable food systems like natural farming which can reduce fertiliser use, lower states’ subsidy burden and reduced manufacturing emissions that are harmful to the environment.
Natural farming advocates “mulching practices and symbiotic intercropping”, unlike “chemical fertiliser-based and high input cost agriculture”, they write. Natural farming can impact “a quarter of the 169 targets under the Sustainable Development Goals”, suggest researchers at the Council on Energy, Environment and Water (CEEW).
The authors, however, also point out that not all farmers have been practising it for long or “have access to functioning markets to secure higher returns”.
Ghosh and Gupta mention CEEW’s latest study that found significantly lower fertiliser consumption — almost 95 per cent reduction — to naturally farm rice and maize. This could save states a lot of money when it comes to fertiliser subsidies, they write.
“With complete penetration of natural farming across Andhra Pradesh, the state could save almost Rs 2,100 crore in fertiliser subsidies annually”, they explain. However, more research, deployment and evaluation is needed to ascertain whether natural farming increases yields and farmers’ incomes, they add.
Let this budget be a tide taken at the flood for reforms
Shruti Rajagopalan | Senior research fellow, Mercatus Center at George Mason University
Mint
Rajagopalan begins her piece with a quote from Shakespeare’s Julius Caesar (Act IV, Scene 3) to make her case for the need of bold reforms in Budget 2020. She identifies four ongoing crises in the Indian economy that require reforms — “jobs, education, agriculture, and the fiscal scenario”.
A simplified tax system having “a single non-zero GST rate, delivering simplicity in calculating, filing, and auditing the tax” is a necessary first step that can help root out tax evasion, she writes.
After this, the scope of GST must be “broadened to include petroleum, alcohol, property sales, etc,” she adds.
Rajagopalan suggests that to improve education, the government must speedily unleash “the profit motive and private entrepreneurship” in primary schooling. She also recommends six solutions to the “distortive and paternalistic regulation[s]” contributing to the farming crisis which include access to regional and global markets, ending minimum support prices and more.
Finally, she recommends that the Narendra Modi government dismantle “industrial licensing and currency controls” as there has been a growing need for it in recent years.
This Time, Some Discipline
Ashok V Desai | Former chief economist, Ministry of Finance
The Economic Times
Desai makes a scathing remark on Finance Minister Nirmala Sitharaman and the Modi government’s pattern of “getting rid of good economists”. After her maiden Budget, Sitharaman made a few missteps like the corporate tax rate cut and “fiddling” with customs duties, he writes.
Now, Sitharaman is dealing with a “feckless economy more in the Latin American style. No growth, only inflation,” he says. A fall in growth rate is usually associated with the “balance sheets of banks, and of the companies that borrowed from them to build infrastructure,” writes Desai.
However, the problem may also be a fall in the entire non-farm sector and further, the central government and its financier, RBI.
Sitharaman “had budgeted for a generous fiscal deficit, and former RBI governor Urjit Patel had reluctantly promised to finance it”. Desai writes that she “ran up the [fiscal] deficit she had budgeted for the entire year in the first six months”.
When “a willing successor from Delhi”, Shaktikanta Das, entered the post he “would print money and buy the central government’s bonds on whatever scale suited her [Sitharaman]”, he adds.
Desai recommends that if anything, Sitharaman restore “the independence of RBI, and sternly balance her budget”.