New Delhi: Ahead of the Budget, executive director of the IMF and the former chief economic advisor K Subramaniam said on Thursday that the government will take forward what it has done in the last few years.
"First of all, we have to keep in mind that this is a vote on account, which means that the government is taking permission from the Parliament for a few months and the entire budget for its expenditure will come after the elections in June or July," said K Subramaniam.
"For the expenditure till then, there are not many steps involved, just like I remember that in 2019 when I was in government, PM Kisan and the standard deduction were increased because the economy was in very good condition. The growth rate of 7.3% is likely to continue, so according to me, the government will take forward what it has done in the last few years and there may be some steps forward," added the former economic advisor K Subramaniam.
He said that the PM Kisan amount could be increased to about Rs 8000 per month. "In PM Kisan, it should be increased to about Rs 8000; apart from this, something can be done for the females. As we have seen in the report of the Chief Economic Advisor, which came recently, the labour force participation rate is quite good, and so it should be encouraged further. Some steps can also be taken to further promote women's power," said K Subramaniam.
Speaking about global headwinds, he said, " If you see that in the last two years, due to the pandemic and then due to the war between Ukraine and Russia, there were a lot of difficulties on the supply side, some of those difficulties have been reduced now and because of that, the inflation, the global inflation, has come down and because of this, whatever you take from the Federal Reserve or the ECB, which is the Central Bank in Europe, they have, I guess, interest rates that they will reduce and by reducing the interest rates, we mean that in the advanced nations and developed countries, both consumption and investment depend a lot on the interest rates. "
Further speaking on the Indian economy, K Subramaniam said, "In India, as it depends on investment, consumption is higher. No, but in developed countries, both consumption and investment are likely to be low because inflation is likely to be low and if the interest rates are low, then investment and consumption will be slightly better, that is why the resilience is visible. The IMF has said that India will perform very well, which is a bright spot, but still, the rate of other countries is low and India's is very high. What can we say after this and what is the reason that India is different? I have said this many times."
"If you look at the growth rate, then you will notice that when the pandemic was going on, very few people believed in it, then it was 7.2% in 2022, and this year 7.3%. So the policies we adopted during the pandemic, which were a mix of supply and demand, and because of the very precise targeting that was done in demand, the expenditure was not that much, but a lot of people who needed it have been increased a lot, has increased by about three and a half times, so all this year 7.3%, so the policies we adopted during the pandemic, which by the mix of supply and demand and Because of the very precise targeting that was done in demand, the expenditure was not that much, but a lot of people who needed it benefited and the capital expenditure, which has been increased a lot, has increased by about three and a half times, so all this Due to good policies," said K Subramaniam.
"Both investment and consumption are not that good but the investment is doing quite well. As you will see from the NSSO data, investment has increased by almost 10%, and consumption has increased by around 4.5% What I am saying is that, As you might remember, in the Economic Survey of 2018-19, the theme we had written was Virtuous Cycle Starting from Private Investment and Investment in General, so when investment increases, it has a good impact on consumption after a few days," the former economic advisor further added.
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