Addressing a workshop on ‘Indian Economy & Economic Survey’ under the aegis of Fkcci here, Union Ministry of Finance Chief Economic Advisor Kaushik Basu, said there would be a lot of scope for small farmers and other producers to derive benefits under the new dispensation once it came into play. “They will begin to do better” under the new format, he claimed contrary to apprehensions being expressed against the move.
Pointing out that once large format multi-national players set up shop, they would in fact be scouting for Indian suppliers to stock up their produce thereby boosting their exports and business prospects. Observing that there was enough evidence to suggest the country needs to allow FDI in multi-brand retail, Basu said it could even act as a tool for busting inflation in the short run.
“Once the supply chain management is modernised,” he said, this would ensure needless waste of perishables. Further, cartel-like activity currently prevailing in concert with APMCs could also be set right under the new regulatory set up which envisages demarking operations into one/two zones.
Stressing the need to buttress country’s industrial and manufacturing sector through labour reforms, envisaged under the new manufacturing policy, to provide level playing field, Basu said, this will help boost manufacturing and industrial activity.
According to Basu, Indian workers will benefit from the new labour laws as firms will demand and employ more workers instead of going in for needless automation, which, in turn, would see the workers becoming better than being laid off. Exhorting the need to tackle inflation by taking appropriate measures, he said, bringing down inflation should be prime even if growth dips in the short turn. “The idea should be to ensure that in the long term the robust growth is sustained” in the near term even if it dampens growth due to the steps taken to rein in inflation.
He explained that over the long run though growth should not be compromised as even if there is one percentage point additional growth it would mean generating one million additional jobs.
Noting that there are no ready formula for fighting inflation, he said, the country was taking all steps to bring down liquidity through monetary and fiscal measures.
