The Reserve Bank’s continued cautionary approach towards holding the priceline is understandable given the unpalatable macro-economic conditions, says Mr C. Balagopal, Managing Director, Terumo Penpol.
He told Business Line , however, that efforts to rein in aggregate demand, which he described as a stupendous task, should also be matched by effective programmes to manage supply-side pressures.
Mr Balagopal said that he would not be overly concerned with the need to put the fisc on the right track but would only wish the Government get its priorities right as in drastically improving the management of the economy.
“We are faced with multiple deficits already — fiscal, trade, current account and balance of payment. To this we have added governance deficit, which has dire consequences for the economy,” Mr Balagopal said.
The Government can make a good beginning by improving its tax collection mechanism, which leaves a lot to be desired.
Bringing excise rates back to the pre-2008 levels, as a couple of economists have suggested as a way tiding over the resource crunch, can only help improve compliance.
But a good collection mechanism needs to be in place to reap the maximum advantage, he said.