The Economic Advisory Council to the Prime Minister (EAC-PM) member, Surjit Bhalla, on Tuesday said that the four years of the Modi government are the ‘best years’ of the Indian economy.

Bhalla also said although the macroeconomic parameters have shown good performance in the last four years, there are concerns over bad loans, and part of the problem can be attributed to the RBI Monetary Policy Committee’s (MPC) decision to keep the interest rates high.

“If you look at any macro parameter, then these (Modi government’s four years) are the best four years of the Indian economy...so without a doubt, the macro performance is better, that is not to say everything is working or everything is fine,” he told PTI in an interview.

“We have the NPA crisis that by all account is a lot worse now as a share of GDP or as a share of loans. And there are reasons why that is grown up and I think in my opinion the tight monetary policy that has been followed by the MPC is in some part to blame for the fact that the NPAs have risen,” Bhalla added.

Income transfer for farmers

The Narendra Modi-led NDA government came to power in May 2014. Asked what more reforms can be undertaken by the Modi government, the eminent economist said the government should consider income transfer instead of higher minimum support price (MSP) and loan waivers.

“We should remove the ban on exports and imports on agricultural goods and we should move towards income transfer for farmers, like it is in Telangana, rather than doing it through MSP,” Bhalla said.

The EAC-PM member also observed that the rupee fall has not been beneficial for the Indian exports. “I don’t think rupee depreciation helped India’s exports,” he said.

Boosting trade

The Commerce Ministry has recently constituted a 12-member high-level advisory group, headed by Bhalla, which would suggest ways to promote the country’s trade.

India’s exports entered the negative zone after five months, by contracting 2.15 per cent to $27.95 billion in September, even though trade deficit narrowed to a five-month low of about $14 billion.

Bhalla also pitched for privatisation of public sector undertakings, saying there are very little arguments for government running businesses.

“Story around the world is more and more privatisation not less and less...Air India should be privatised. Government can keep ownership in it but certainly should not be managed by the government,” he noted.

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